Tuesday

23rd Jan 2018

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.

MEPs may bar killer drones from EU research cash

EU defence fund is expected to hand out €500m to companies across the EU if they work together on 'defence products'. Under the current proposal, the development of weapons of mass destruction would not be excluded.

EIB 'more sensitive' to fraud after Dieselgate

The president of the European Investment Bank, Werner Hoyer, said the bank had high standards - but did not explain why an anti-fraud report on a loan to Volkswagen was being kept secret.

Stakeholders' Highlights

  1. Nordic Council of MinistersNordic Solutions for Sustainable Cities: New Grants Awarded for Branding Projects
  2. Mission of China to the EUTrade Between China, Belt and Road Countries up 15%
  3. Nordic Council of MinistersOresund Inspires Other EU Border Regions to Work Together to Generate Growth
  4. Mission of China to the EUTrade Between China, Belt and Road Countries up 15%
  5. AJC Transatlantic InstituteAJC Calls on EU to Sanction Iran’s Revolutionary Guards, Expel Ambassadors
  6. Dialogue PlatformRoundtable on "Political Islam, Civil Islam and The West" 31 January
  7. ILGA EuropeFreedom of Movement and Same-Sex Couples in Romania – Case Update!
  8. EU2017EEEstonia Completes First EU Presidency, Introduced New Topics to the Agenda
  9. Bio-Based IndustriesLeading the Transition Towards a Post-Petroleum Society
  10. ACCAWelcomes the Start of the New Bulgarian Presidency
  11. Mission of China to the EUPremier Li and President Tusk Stress Importance of Ties at ASEM Summit
  12. EU2017EEVAT on Electronic Commerce: New Rules Adopted

Latest News

  1. Greece and creditors prepare bailout exit
  2. EU stands by Palestine on Jerusalem
  3. MEPs may bar killer drones from EU research cash
  4. Europe's social democrats are having a hard time
  5. How Oettinger's CO2 permit sale could fill Brexit blackhole
  6. New Polish foreign minister tries to charm EU commission
  7. Middle East, Messi and missing MEPs on agenda This WEEK
  8. Instagram and Google Plus join EU anti-hate speech drive

Stakeholders' Highlights

  1. European Jewish CongressChair of EU Parliament Working Group on Antisemitism Condemns Wave of Attacks
  2. Counter BalanceA New Study Challenges the Infrastructure Mega Corridors Agenda
  3. Dialogue PlatformThe Gülen Community: Who to Believe - Politicians or Actions?" by Thomas Michel
  4. Plastics Recyclers Europe65% Plastics Recycling Rate Attainable by 2025 New Study Shows
  5. European Heart NetworkCommissioner Andriukaitis' Address to EHN on the Occasion of Its 25th Anniversary
  6. ACCACFOs Risk Losing Relevance If They Do Not Embrace Technology
  7. UNICEFMake the Digital World Safer for Children & Increase Access for the Most Disadvantaged
  8. European Jewish CongressWelcomes Recognition of Jerusalem as the Capital of Israel and Calls on EU States to Follow Suit
  9. Mission of China to the EUChina and EU Boost Innovation Cooperation Under Horizon 2020
  10. European Gaming & Betting AssociationJuncker’s "Political" Commission Leaves Gambling Reforms to the Court
  11. AJC Transatlantic InstituteAJC Applauds U.S. Recognition of Jerusalem as Israel’s Capital City
  12. EU2017EEEU Telecom Ministers Reached an Agreement on the 5G Roadmap