© Reuters. European Commissioner for Economic and Financial Affairs Moscovici presents the EU executive’s autumn economic forecasts in BrusselsBy Jan Strupczewski
BRUSSELS (Reuters) – European Commission proposals to deepen the integration of the euro zone will seek to make the whole of the European Union more united and improve the democratic accountability of euro zone institutions, Economics Commissioner Pierre Moscovici said.
The Commission package for the 19 countries sharing the euro will be unveiled on Wednesday. It is aimed at making the single currency area more resilient to potential future crises and would follow two guiding principles, said Moscovici.
“First, that it should advance the unity of Europe through greater convergence within the euro area and the wider Union. Second, that it should make the governance of the euro area more democratic and efficient at the same time,” he said.
The approach is to alleviate concerns among non-euro zone countries that deeper integration would make them second-class members of the EU, with less say and funds in the future.
The Commission package will address ideas floated by French President Emmanuel Macron on creating a euro zone budget, a euro zone finance minister and a euro zone parliament.
Other ideas include transforming the euro zone bailout fund into a European Monetary Fund and setting up a sovereign insolvency mechanism — a German-supported project.
There are also plans to help the European banking system by setting up a Europe-wide bank deposit insurance scheme.
The ideas will be discussed by all of the European Union’s finance ministers, except Britain, later on Monday in preparation for a euro summit of the 27 leaders on Dec. 15.
“Frankly I don’t expect any major step forward from the Eurogroup tonight, because as you know member states are not totally aligned. And also there is no government in Germany, so there cannot be decisions at this time and we all know that,” Moscovici told reporters.
BAILOUT FUND UNDER EUROPEAN PARLIAMENT CONTROL
Moscovici said the Commission would propose on Wednesday to make the euro zone bailout fund, the European Stability Mechanism (ESM), a European Union institution rather than a body owned and run by euro zone governments as it is now.
“The ESM cannot stay as it is — a purely intergovernmental body, it should be submitted to .. the control of the European Parliament,” he said.
But the outgoing chairman of euro zone finance ministers, Jeroen Dijsselbloem, has said there was no broad support for that idea among ministers.
Seeking more unity and accountability, the Commission would like a euro zone finance minister to be a finance minister of the whole EU and responsible to the European Parliament.
Under the current arrangement, the chairman of euro zone finance ministers often testifies before the parliament’s economic committee, but it has no power over him.
The EU finance minister, under the Commission proposals, would also be in charge of the ESM bailout fund and be a senior member of the EU executive arm — another proposal that is unlikely to find broad support among euro zone governments.
“This is not about a Commission power grab. It is not about turf wars. It is about mechanisms that ensure proper democratic, transparent, accountable decision-making,” Moscovici said.
The Commission’s proposals for a euro zone budget are likely to follow similar logic. Instead of a separate pool of money for the euro zone, the Commission is likely to propose a dedicated euro zone line in the broader EU budget.
Source: Investing.com
