Friday

15th Dec 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 for a 30 day free trial.

  1. €150 per year
  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.

Commission wants more centralised eurozone by 2019

EU leaders will discuss at their summit next week the commission's proposals, which include a European Monetary Fund and an EU finance minister - but no eurozone budget, as proposed by French president Emmanuel Macron.

News in Brief

  1. Luxembourg appeals Amazon tax decision
  2. EU leaders agree to open phase 2 of Brexit talks
  3. Juncker: May made 'big efforts' on Brexit
  4. Merkel took 'tough' line on Russia at EU summit
  5. EU leaders added line supporting 'two-state' solution
  6. EU leaders agree to 20 European Universities by 2024
  7. Belgian courts end legal proceedings against Puigdemont
  8. French central bank lifts 2017 growth forecast

Stakeholders' Highlights

  1. Dialogue PlatformThe Gülen Community: Who to Believe - Politicians or Actions?" by Thomas Michel
  2. Plastics Recyclers Europe65% plastics recycling rate attainable by 2025 new study shows
  3. European Heart NetworkCommissioner Andriukaitis' Address to EHN on the Occasion of Its 25th Anniversary
  4. ACCACFOs Risk Losing Relevance If They Do Not Embrace Technology
  5. UNICEFMake the Digital World Safer for Children & Increase Access for the Most Disadvantaged
  6. European Jewish CongressWelcomes Recognition of Jerusalem as the Capital of Israel and Calls on EU States to Follow Suit
  7. Mission of China to the EUChina and EU Boost Innovation Cooperation Under Horizon 2020
  8. European Gaming & Betting AssociationJuncker’s "Political" Commission Leaves Gambling Reforms to the Court
  9. AJC Transatlantic InstituteAJC Applauds U.S. Recognition of Jerusalem as Israel’s Capital City
  10. EU2017EEEU Telecom Ministers Reached an Agreement on the 5G Roadmap
  11. European Friends of ArmeniaEU-Armenia Relations in the CEPA Era: What's Next?
  12. Mission of China to the EU16+1 Cooperation Injects New Vigour Into China-EU Ties

Latest News

  1. Polish PM ready for EU sanctions scrap
  2. Dutchman to lead powerful euro working group
  3. EU mulls post-Brexit balance of euro and non-eurozone states
  4. EU asylum debate reopens old wounds
  5. Estonia completes two out of three priority digital bills
  6. EU countries are not 'tax havens', parliament says
  7. Tech firms' delays mean EU needs rules for online terror
  8. Slovak PM: Human rights are not a travel pass to EU

Stakeholders' Highlights

  1. EPSUEU Blacklist of Tax Havens Is a Sham
  2. EU2017EERole of Culture in Building Cohesive Societies in Europe
  3. ILGA EuropeCongratulations to Austria - Court Overturns Barriers to Equal Marriage
  4. Centre Maurits CoppietersCelebrating Diversity, Citizenship and the European Project With Fundació Josep Irla
  5. European Healthy Lifestyle AllianceUnderstanding the Social Consequences of Obesity
  6. Union for the MediterraneanMediterranean Countries Commit to Strengthening Women's Role in Region
  7. Bio-Based IndustriesRegistration for BBI JU Stakeholder Forum about to close. Last chance to register!
  8. European Heart NetworkThe Time Is Ripe for Simplified Front-Of-Pack Nutrition Labelling
  9. Counter BalanceNew EU External Investment Plan Risks Sidelining Development Objectives
  10. EU2017EEEAS Calls for Eastern Partnership Countries to Enter EU Market Through Estonia
  11. Dialogue PlatformThe Turkey I No Longer Know
  12. World Vision7 Million Children at Risk in the DRC: Donor Meeting to Focus on Saving More Lives