Monday

21st Aug 2017

Barroso to unveil 'political union' plan at EU summit

  • Barroso (l): 'I will urge the European Council to undertake concrete commitments to develop full economic and monetary union' (Photo: ec.europa.eu)

European Commission President Jose Manuel Barroso has said member states must agree to a big common budget, a future banking union and - ultimately - political union in order to save the EU.

His speech at the European Parliament in Strasbourg on Wednesday (13 June) comes before an EU summit on 28 June.

Thank you for reading EUobserver!

Subscribe now and get 40% off for an annual subscription. Sale ends soon.

  1. €90 per year. Use discount code EUOBS40%
  2. or €15 per month
  3. Cancel anytime

EUobserver is an independent, not-for-profit news organization that publishes daily news reports, analysis, and investigations from Brussels and the EU member states. We are an indispensable news source for anyone who wants to know what is going on in the EU.

We are mainly funded by advertising and subscription revenues. As advertising revenues are falling fast, we depend on subscription revenues to support our journalism.

For group, corporate or student subscriptions, please contact us. See also our full Terms of Use.

If you already have an account click here to login.

Barroso, EU Council president Herman Van Rompuy, European Central Bank chief Mario Draghi and Jean-Claude Juncker - the head of the euro-using countries' club, the Eurogroup - are drafting a joint paper on how EU leaders can stop the crisis.

The text will be a political manifesto rather than a legal proposal, officials say.

"I will urge the European Council to take concrete commitments towards a fully developed economic and monetary union and a process that maps out the steps how to get there," Barroso told MEPs.

He said countries must agree here and now to generous EU spending in the 2013 to 2020 period.

He noted that 97 percent of public investment in Hungary and over 50 percent in Poland comes from EU funds. "What would the situation be in these countries without the contribution of the European budget?" he asked.

He also urged governments to "refine" the rules of the EU bail-out fund, the ESM, to make it easier to help struggling banks and to adopt last week's commission proposal for EU banks to set aside more rainy day capital.

He said the next step - which "might require [EU] treaty changes" - would be a "banking union."

The move would see EU-level bank supervision, a joint deposit guarantee fund and a new fund dedicated to bailing-out big banks which get into trouble.

Barroso's final step - fiscal and political union - would see EU countries issue joint bonds, co-ordinate tax policy and co-ordinate national spending on everything from healthcare to schools and social welfare.

He noted that some non-euro-using countries might want to stay out. But he added: "Our economic relations bind us all: euro area members and non-members alike, our futures are linked."

Leading MEPs said things should move more quickly.

Belgian liberal Guy Verhofstadt said the summit paper should be a legal proposal for creating a "federal union" and that commission budget plans should call for "own resources" - direct taxation of EU citizens by Brussels.

French centre-right deputy Joseph Daul said that - to increase democracy - the EU parliament president should take part in EU summits instead of leaving the room after making a speech.

Austrian centre-left MEP Johannes Swoboda held up a copy of The Economist - a magazine - with a picture of the EU as a sinking ship.

"Please can we start the engines now Mrs Merkel ... not in one or two years' time?" he asked, referring to the German Chancellor's step-by-step approach to the crisis.

British eurosceptic Nigel Farrage, a former investment banker, said the "euro-Titanic" has "hit the iceberg."

He noted that Rome is borrowing money from markets at almost seven percent in order to lend its €20 billion part of the Spanish rescue to Madrid at three percent. "We're actively driving Italy toward a bail-out," he said.

Barroso already floated his banking union idea in a speech in May and again in a Financial Times interview on Monday.

For her part, German Bundesbank vice-president Sabine Lautenschlaeger on Wednesday told the Financial Times Deutschland that the banking union is unthinkable without fiscal/political union at the same time.

"Whoever accepts liability also has to have a right to control [it]," she said.

Brussels: 'Banks should pay for banks'

The EU commission has unveiled proposals to change the too-big-to-fail rationale that has seen billions of euros of public money pumped into ailing banks.

Opinion

No more integration without more representation

Despite the many calls in recent months for another great leap forward in European integration, remarkably little attention is being paid to the EU’s growing democratic deficit.

Opinion

Macron goes east to test appetites for EU integration

The next few months will be decisive in selecting who stays in the core of the EU and who stays behind, writes Tomas Prouza, a former state secretary for European Affairs of the Czech Republic.

News in Brief

  1. Austria has begun checks at Italian border
  2. Slovenian PM: Brexit talks will take longer than expected
  3. Merkel backs diesel while report warns of economic harm
  4. UK to publish new Brexit papers this week
  5. Macedonia sacks top prosecutor over wiretap scandal
  6. ECB concerned stronger euro could derail economic recovery
  7. Mixed Irish reactions to post-Brexit border proposal
  8. European Union returns to 2 percent growth

Stakeholders' Highlights

  1. European Jewish CongressEuropean Governments Must Take Stronger Action Against Terrorism
  2. European Healthy Lifestyle AllianceDoes Genetics Explain Why So Few of Us Have an Ideal Cardiovascular Health?
  3. EU2017EEFuture-Themed Digital Painting Competition Welcomes Artists - Deadline 31 Aug
  4. ACCABusinesses Must Grip Ethics and Trust in the Digital Age
  5. European Jewish CongressEJC Welcomes European Court of Justice's Decision to Keep Hamas on Terror List
  6. UNICEFReport: Children on the Move From Africa Do Not First Aim to Go to Europe
  7. Centre Maurits CoppietersWe Need Democratic and Transparent Free Trade Agreements Says MEP Jordi Solé
  8. Counter BalanceOut for Summer, Ep. 2: EIB Promoting Development in Egypt - At What Cost?
  9. EU2017EELocal Leaders Push for Local and Regional Targets to Address Climate Change
  10. European Healthy Lifestyle AllianceMore Women Than Men Have Died From Heart Disease in Past 30 Years
  11. European Jewish CongressJean-Marie Le Pen Faces Trial for Oven Comments About Jewish Singer
  12. ACCAAnnounces Belt & Road Research at Shanghai Conference