BRUSSELS (MNI) – European Union leaders meeting in Brussels next
week face a stark choice between “deeper integration or disintegration”
as the EU confronts “the most challenging time in its history,” Olli
Rehn, the European Commissioner for Economic and Monetary Affairs,
warned on Wednesday.
“Our economic and monetary union will either have to be completed
through much deeper economic union or we will have to accept the
disintegration of over half a century of European integration,” Rehn
told members of the European Parliament.
Interest in Eurobonds has been revived as the sovereign debt of
many Eurozone governments comes under great stress in financial markets.
But such jointly-issued bonds would only be useful if fiscal and
economic governance were strengthened further, he said.
Changing the EU treaty to set tougher rules, however, “cannot offer
an immediate contribution to provide a solution to the current crisis,”
Rehn warned.
Instead the European Commission believes tougher rules could be
more quickly agreed under the existing treaty, he said. Last week the
Commission proposed legislation that would give it sweeping powers to
vet national budgets and sanction wayward governments.
As governments across the EU tighten their budgets next year, more
attention needs to be paid to ensure that spending cuts and tax hikes
don’t suffocate growth, the commissioner said.
With little room for economic stimulus measures, structural reforms
are the key to boosting growth, Rehn said. “The policies needed may not
be new,” he said, but it is now time to “focus on their implementation.”
–Brussels Bureau: +324-952-28374; pkoh@marketnews.com
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