BRUSSELS (MNI) – EU Council President Herman Van Rompuy on Thursday
publicly acknowledged that he planned to raise with EU leaders the
prospect of a shared budget for the Eurozone and of reform contracts
with governments, ideas which emerged in leaked documents earlier this
week.
Van Rompuy stressed that the idea of a shared “fiscal capacity” for
the Eurozone would be to perform specific functions within the currency
bloc and should not be confused with discussions on the EU’s multi-year
budget.
Although vague at this stage, the idea of a Eurozone budget could
create a politically palatable way for richer members of the currency
bloc to provide some support for struggling partners without assuming
any of their liabilities, in the way that common bonds would.
Pushed heavily as a way out of the crisis last year, the idea of
jointly issued bonds has been buried for now because of intense
political hostility in some countries to exposing their taxpayers to
less fiscally reponsible governments elsewhere.
Contracts between governments and EU authorities to enforce
implementation of economic and structural reforms, could be supported by
“temporary and targeted financial incentives,” Van Rompuy said.
EU leaders meeting here next week will discuss the ideas but are
expected to spend more time hammering out plans for a banking union
based on common supervision of Eurozone banks under the European Central
Bank.
–Brussels Newsroom, +324-952-28374; pkoh@mni-news.com
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