Friday

25th May 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.

Dear EUobserver reader

Subscribe now for unrestricted access to EUobserver.

Sign up for 30 days' free trial, no obligation. Full subscription only 15 € / month or 150 € / year.

  1. Unlimited access on desktop and mobile
  2. All premium articles, analysis, commentary and investigations
  3. EUobserver archives

EUobserver is the only independent news media covering EU affairs in Brussels and all 28 member states.

♡ We value your support.

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

EU budget must not fortify Europe at expense of peace

Given the European Commission new budget's heavy focus on migration, border management and security, many are asking whether the proposal will fortify Europe at the expense of its peace commitments.

Opinion

Europe's budget stasis

The EU's budgetary muddling through might not be enough when the next crisis hits.

News in Brief

  1. Gazprom accepts EU conditions on gas supplies
  2. Facebook tells MEPs: non-users are not profiled
  3. Commission proposes ending France deficit procedure
  4. UK households hit with Brexit income loss
  5. Report: EU faces 10% cut in steel exports to US
  6. Australia wants more access to EU agricultural market
  7. CV of Italian PM candidate under scrutiny
  8. Puigdemont Spain extradition rejected by German court

Stakeholders' Highlights

  1. Nordic Council of MinistersOECD Report: Gender Equality Boosts GDP Growth in Nordic Region
  2. Centre Maurits Coppieters“Peace and reconciliation is a process that takes decades” Dr. Anthony Soares on #Brexit and Northern Ireland
  3. Mission of China to the EUMEPs Positive on China’s New Measures of Opening Up
  4. Macedonian Human Rights MovementOld White Men are Destroying Macedonia by Romanticizing Greece
  5. Counter BalanceControversial EIB-Backed Project Under Fire at European Parliament
  6. Nordic Council of MinistersIncome Inequality Increasing in Nordic Countries
  7. European Jewish CongressEU Leaders to Cease Contact with Mahmoud Abbas Until He Apologizes for Antisemitic Comments
  8. International Partnership for Human RightsAnnual Report celebrates organization’s tenth anniversary
  9. Nordic Council of MinistersNordic Cooperation Needed on Green Exports and Funding
  10. Mission of China to the EUPremier Li Confirms China Will Continue to Open Up
  11. European Jewish CongressCalls on Brussels University to Revoke Decision to Honour Ken Loach
  12. Sustainable Energy Week 2018"Lead the Clean Energy Transition"- Register and Join Us in Brussels from 5 to 7 May

Latest News

  1. Green stadiums at the 2018 FIFA World Cup
  2. Visegrad Four 'nothing to hide' on rule of law issue
  3. GDPR does not (yet) give right to global oblivion
  4. Privacy Shield less relevant given GDPR, says data chief
  5. Unknown academic to lead Italy into EU clash
  6. 'Killer robot' projects eligible for EU defence fund
  7. Funding for European values needs radical changes
  8. Feeble EU format deflates Zuckerberg 'hearing'

Stakeholders' Highlights

  1. EU Green Week 2018Green Cities for a Greener Future. Join the Debate in Brussels from 22 to 24 May
  2. Nordic Council of Ministers12 Recommendations for Nordic Leadership on Climate and Environment
  3. Macedonian Human Rights MovementOxford Professor Calls for an End to the Anti-Macedonian Name Negotiations
  4. ACCAPeople Who Speak-Up Should Feel Safe to Do So
  5. Mission of China to the EUProgress on China-EU Cooperation
  6. Nordic Council of MinistersWorld's Energy Ministers to Meet in Oresund in May to Discuss Green Energy
  7. ILGA EuropeParabéns! Portugal Votes to Respect the Rights of Trans and Intersex People
  8. Mission of China to the EUJobs, Energy, Steel: Government Work Report Sets China's Targets
  9. European Jewish CongressKantor Center Annual Report on Antisemitism Worldwide - The Year the Mask Came Off
  10. UNICEFCalls for the Protection of Children in the Gaza Strip
  11. Mission of China to the EUForeign Minister Wang Yi Highlights Importance of China-EU Relations
  12. Nordic Council of MinistersImmigration and Integration in the Nordic Region - Getting the Facts Straight