European leaders said working on fiscal union – Angular Contact Ball Bearing – NTN Bearing
FRANKFURT–The leaders of European institutions are working on a plan to create a fiscal union in an effort to save the euro, German magazine Der Spiegel reports over the weekend, without citing sources.
Under the plan, which is being worked out by European Commission President Jose Manuel Barroso, European Central Bank head Mario Draghi, European Council President Herman Van Rompuy and Jean-Claude Juncker, the head of the Eurogroup of euro-zone finance ministers, member countries would no longer be in a position to raise new debt independently, Der Spiegel says.ys.
At their informal summit on May 23, European leaders charged Van Rompuy, Barroso, Draghi and Juncker to pull together proposals for the next summit that would help leaders create a road map for discussion about future European architecture.
The issues on the table fall broadly into two categories. There are ideas such as creating joint European bonds, a European-wide deposit insurance and more broadly a “banking union,” which fall into the category of mutual liability for sovereign debt and European banks. These are ideas French President Francois Hollande backs, but have been anathema to German Chancellor Angela Merkel unless power to enforce budget discipline is shifted to Europe.
Germany is pushing for far-reaching European control of national budgets, a fiscal-policy union, which would require member states to cede control of national budgets to some future European fiscal authority, an idea France opposes.
Der Spiegel reports that a member country would only have autonomy regarding funding that is covered by its own revenue income. Countries that need funding beyond that would have to report their needs to the group of euro-zone finance ministers, who would then decide about the financial needs of each country and issue joint euro-zone bonds to finance that debt.
The rules would only be valid for future borrowing, not existing liabilities, the magazine adds.
The ECB declined to comment on the Der Spiegel article.
Magazine web site: www.spiegel.de
(Bill Boston in Berlin contributed to this article.)
Write to the Frankfurt Bureau at djnews.
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