The European Commission (EC) said today that it is time to discuss the creation of an “Economic and Monetary Union 2.0″ should undergo further fiscal integration and a pooling of sovereign debt to overcome the crisis.
This has been assured the financial vice-president of the EU executive, Olli Rehn, in a speech in Strasbourg (France) before the Committee on Economic and Monetary Affairs.
According to Rehn, the “further intensification of sovereign debt crisis” shows the need to go beyond the agreed reforms so far within the eurozone and the steps necessary to design towards a “total economic union” to complement the monetary union.
“Demonstrating the clear political commitment from Member States of the euro will be a part of restoring confidence in the euro area,” he assured.
The output to the “complicated problems of complex eurozone,” however, has a unique solution, but should include several aspects, said.
Rehn stressed in particular that any progress towards greater pooling, for example the issue of Eurobonds, will have to be accompanied by “a further strengthening of our culture of stability.”
“We can not overcome our problems by focusing on a joint issue debt without simultaneously ensuring fiscal sustainability,” he insisted.
Nor, according to Rehn, will be the opposite, because “no culture can ensure stability in the eurozone without a significant share of the burden of adjustment.”
In this sense, has warned that more fiscal integration needed to “justify” the pooling of debt include “probably more explicit transfer of sovereignty,” so it could be viable only “medium term”.
In the short term, Rehn does believe that you can move towards the establishment of a joint bank in the euro area to strengthen the financial sector in Europe.
The commissioner has called for an “early confirmation of action steps” towards the introduction of these reforms, believing that it “will emphasize the stability and solidity of the euro and help restore confidence even in the short term.”
“It’s time to move forward, to discuss and decide how to complete the creation of a” 2.0 Economic and Monetary Union, “he insisted.
Category: Mutual Funds