Europe's debt crisis, highlighted by fears of a Greek meltdown for a second time in just over a year, is raising fresh calls to strengthen EU political union to guarantee a future for the common currency.
As euro nations and the IMF bid to agree on a second bailout for Greece tipped to be almost as big as last year's
110-billion-euro rescue, European Union leaders come under pressure at a June 23-24 summit to accelerate joint economic governance.
'We have a European bank but no European budgetary policy, and that is sorely lacking,' Belgian finance minister Didier Reynders said Friday.
'The Greek crisis shows we need to reinforce Europe.'
The building debt crisis late 2008 and early 2009 forced EU leaders both to seek joint solutions to pending defaults and wake up to the fact that members were far from sticking to strict budgetary rules and enforcing shared economic targets.
A first step came with the 2010 the agreement to set up a European monetary fund, a move unimaginable a few years back.
But the joint rescue fund, since used to pump funds into debt-stricken Ireland and Portugal, has only a three-year life span and details remain to be worked out to give the European lender of last resort a lasting existence.
Greece's failure to resolve its problems, though partly due to the impact of worse-then-expected recession. is seen as a wake-up call for those demanding closer economic integration within the 27-nation bloc.
Stepping in to plead for greater union as Greece faced meltdown, EU president Herman Van Rompuy last week said sharing a currency meant that structural reforms were necessary across the 17 euro-states.
'Each country's destiny is linked to the destiny of the whole,' he said. 'We simply cannot have one currency and 17 divergent policies.'
One idea put forward by European Central Bank chief Jean-Claude Trichet is a eurozone finance ministry.
'I like this idea,' said Luxembourg premier Jean-Claude Juncker, who heads the euro nations, 'as it would contribute to tighter monitoring of budget policies.'
'What I like about it is it calls for more Europe,' he said, while admitting practically in the same breath that 'it won't work', given the reluctance of national governments to heed the advice or recriminations dished up by the eurogroup or EU executive.
At stake at this week's summit is a new stab to finalise a raft of measures to force EU states to stick to strict budgetary and economic targets—setting deficit and debt ceilings of three per cent and 60 per cent respectively of GDP—which has caused a rumpus with the European Parliament.
Source : New Age
