Ten EU foreign ministers have spelled out radical suggestions to use the eurozone debt crisis as a springboard towards closer integration, including creation of a European monetary fund and a European finance minister.
The German-inspired initiative is intended to stimulate debate on radical new steps towards political union to be launched by EU leaders at their summit at the end of the month. It is also hoped that it will galvanise thinking in other Member States about steps towards “political union”.
On the economic front, the ministers suggested the creation of a European framework for restructuring or winding-up ailing banks, as well as tougher rules to reinforce economic cooperation – including setting strict guidelines for social spending – and a stronger role for EU institutions in fixing national budgets.
“We should take advantage of the crisis to take a historic step towards more integration”, said Guido Westerwelle, German foreign minister, when he spelt out the initial thinking of the study group on the future of Europe.
The group involves Mr Westerwelle’s counterparts from France, Italy, Spain, Poland, the Netherlands, Austria, Belgium, Portugal and Luxembourg.
The ministers backed a “three pillar” approach to resolving the crisis, combining budget consolidation, boosting economic growth and competitiveness, and solidarity, a significant rebalancing of the traditional German emphasis on budget discipline as a precondition for the other two.
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The proposals have been strongly criticised by Frank Schäffler, an MP with Westerwelle’s liberal FDP party, who argued that the plan was incompatible with liberal principles and that Europe "doesn’t need a centralised and planned economy".
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