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The Brussels executive body called for reviving those policies as part of a sweeping, 81-page policy document ahead of a May 9 gathering of the EU’s 27 leaders in Sibiu, Romania.
“To complete our Economic and Monetary Union, a European safe asset, introduced gradually, would also be a beneficial stabilising tool,” the Commission wrote. “It would require work in parallel on the regulatory treatment of sovereign exposures.”
The document puts forward proposals aimed not just at next week’s summit meeting, but the next set of commissioners due to replace the team of President Jean Claude Juncker this fall.
The paper also calls for simplifying the eurozone’s budget rules, in anticipation of more countries adopting the currency, along with highlighting economic achievements of the Commission’s five-year mandate.
EU governments last year rejected a Commission bill to create so-called European safe bonds, or ESBies, made by bundling together debt from different euro-area countries. Finance ministers objected that the measure could open the door to mutualizing national debt.
The EU also had previously put off the idea of introducing capital requirements for banks’ holdings of government bonds. Ministers called for waiting for action from international standard-setters, which went on to shelve the issue — partly due to European doubts.
Sovereign-risk weighting, as the capital measure is called, has regained currency as a possible tradeoff for a shared deposit guarantee within the eurozone.
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