European Council President Herman Van Rompuy will present a report exploring ways to deepen economic integration in the euro zone when EU leaders hold their next meeting on 28-29 June.
Speaking to the press after an EU summit in Brussels, which lasted until 01.00 am, Van Rompuy announced that “we need to take Economic Monetary Union to a new stage.”
"I will report in June, in close co-operation with the Commission President, the Presidents of the Eurogroup and the European Central Bank on the main building blocks and on a working method to achieve this objective,” he said.
Long-term project
The summit saw French President François Hollande and German Chancellor Angela Merkel openly state their differences on Eurobonds, which France wants to introduce rapidly as a way to mutualise debt in the euro zone and reduce the borrowing costs of countries like Spain and Italy.
Speaking after the summit, Merkel admitted that “each party put their own opinion" on the table and "spoke from different perspectives". "It was a very divergent conversation,” she said.
Hollande did not try to hide Franco-German divergences. "For now, Germany's line of thinking is that Eurobonds, if I give the most optimistic version, could only be an end point, whereas for us they are a starting point. It's true that there is a difference."
Van Rompuy said Eurobonds were not off the table completely but could only be considered after a new stage in the EU's fiscal and economic integration.
"Euro bonds were discussed in the specific chapter of the long-term project of deepening the monetary and economic union," Van Rompuy said. "Nobody was asking for an immediate introduction. This would take time. It is the end of a process to consider what the legal implications of all this are."
Fiscal union
The European Central Bank's President Mario Draghi was on the same page. Issuing jointly backed European debt would not make sense until the euro zone reaches some kind of fiscal union, he said after the EU leaders meeting.
"Euro bonds make sense when you have a fiscal union, otherwise they don't make sense," Draghi told reporters in Brussels
Asked later by EurActiv if some kind of central EU finance ministry would be considered, Van Rompuy did not dismiss the idea but said it was just one among a number of options being discussed.
“There are a range of possibilities but we need the building blocks and the roadmaps,” he said. “We need to see what can be done within the remit of the treaties, and for that we need the Brits, but it’s too soon to say exactly what will be considered.”
German leaders, for their part, seemed open to the idea of a fiscal union.
Germany’s European Central Bank executive board member, Jörg Asmussen, said ahead of the summit that the euro zone should be backed by “a fiscal union and banking union as well as a democratic legitimised political union”.
His words were echoed by Finance Minister Wolfgang Schäuble who recently argued in favour of a directly-elected European Commission president with greater control over the EU's fiscal policy.
