Monday

13th Jul 2020

Markets will drive a two-speed Europe, says Barroso

  • Barroso: "I believe there is a strong willingness to support the financial stability of the eurozone" (Photo: consilium.europa.eu)

European commission president Jose Manuel Barroso has said he believes the eurozone will integrate further with market demands now trumping past ideological debates.

"My assessment is that the European Union will go further into integration, namely around the eurozone," he told an audience on Tuesday (6 September) during a visit to Australia.

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He said that "in the past" debates about the future of Europe were "political or even ideological" with federalists on the one side and intergovernmentalists on the other.

But now with markets calling for mechanisms for quickly dealing with the eurozone debt crisis, the fundamentals of the debate have been altered.

"Now, the markets are demanding more integration at least for the euro area. And this is new," said Barroso.

"The discussion is how far can we go now, do we need a new treaty to go further, what can we do to reinforce the governance of the eurozone," he said, becoming the latest in a series of high level EU officials to raise the spectre of yet another revision of the EU treaties.

Barroso, former prime minister of Portugal one of the three bailed-out eurozone countries, also touched on one of the most significant questions thrown up by crisis – how to balance the demands of the market with the slower and messier democratic process.

"Now [eurosceptics] understand that one of the issues that the markets are looking at is the capacity of the euro area to have quick answers because the markets are very fast and democratic procedures are always slower than the markets. And we have to understand this."

This issue is at the core of a debate in paymaster Germany where parliamentarians are currently discussing what strings to attach in return for their agreement to make the eurozone bailout fund more flexible.

German finance minister Wolfgang Schaueble has already indicated he is opposed to greatly increased parliamentary control, fearing it will make the fund too cumbersome, and therefore weak in eyes of the markets.

The country’s constitutional court is also expected to highlight the importance of parliamentary democratic process on Wednesday when it gives its verdict on the legality of Germany’s involvement in saving the eurozone, including partaking in the first bailout of Greece last year.

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