Barroso said yesterday [30 May] that the Commission would look at further steps towards a federalist-style "full economic union" to complete the monetary union, currently experiencing its most difficult time since the launch of the euro in 1999.
The comments were made as Barroso presented the Commission's recommendations to the member countries concerning their efforts to ensure fiscal discipline and boost growth.
The Commission President said that the pace and sequencing of these reforms would need to be decided by EU heads of state and governments but that the Commission would pursue an ambitious approach. He added that some of those decisions could not be taken immediately, as they required a new legal basis.
A banking union and single deposit guarantee scheme
Barroso also addressed plans for project bonds to boost investment in energy, transport and the digital economy, and augment the firepower of the European Investment bank (EIB), as well as better utilising the EU's regional funds.
To this, he added two other "building blocks" – a banking union with integrated financial supervision and a single deposit guarantee scheme, ensuring that banks retain a minimum of cash available to safeguard personal savings.
The idea of a eurozone banking union with a bail-out potential has been making headway in recent days, as Spain's banking crisis has deepened.
The Commission had already proposed a single deposit guarantee scheme years ago, Barroso explained, but it had been unanimously rejected by member states. This time around though, a number of countries were pressing for such a scheme.
There was no mention of Eurobonds, currently a divisive issue. The French President François Hollande wants Eurobonds to be introduced rapidly, while Germany's Chancellor Angela Merkel sees this possibility only at the end of a long process in which EU countries would achieve fiscal convergence. A banking union is another step that Germany reportedly sees as a precondition for the introduction of Eurobonds.
Asked if his statement indicated the need for a new treaty change, similar to the colossal efforts which led to the Lisbon Treaty in December 2009, Barroso said that it was important to use “all possibilities” to move towards completing monetary union, including already available instruments.
“Regarding any legal issues for the future, we believe we should be ready to address them,” he said. “For full confidence in the future of the euro area, it is important that the member states agree to launch a process for more financial and economic integration”.
Launching such a process was also important for improving investors’ confidence, he added.
“What we are proposing is to establish a roadmap also with a calendar. The Commission will advocate an ambitious and structured response for a longer-term perspective on the future of the EU’s economic and monetary union."
The pace and sequencing of these developments, including a roadmap and a timetable, still needed to be worked out.
"An early confirmation of the steps to be taken will underscore the irreversibility and the solidity of the euro,” Barroso said, adding that this was precisely what he planned to propose to EU leaders at their June summit.
‘Euro is not the cause of the crisis’
Barroso indicated that he was concerned about public opinion on issues going beyond further EU integration. It was normal that support for further European integration should fall during austere economic times, he explained.
“This is why I am asking all the leaders - including at national level - to explain the reasons for the difficulties and the best way to address them. And I believe the difficulties we face today are not the result of the euro. That’s quite clear,” he said.
The use of the euro by 17 EU countries created specific challenges requiring new instruments, like the European Stability Mechanism (ESM), he said. New recommendations to enhance financial stability and boost growth could not be ruled out.
Reform ‘not by passion, but by necessity’
“If we leave it only to the governments, you will not have an objective, independent analysis of what’s going on in Europe today,” he said.
On the other hand, “if you leave this only to the member states, I can tell you no significant changes will happen. This is why we need more integration”.
Barroso ended with an appeal for unity in facing current challenges. "It requires leadership, sometimes courage, to explain what are the alternatives to the member states," he said.
"I think this will be done, if not by passion, by necessity”.
The federalist ideas advanced by Barroso will probably be more warmly received in Beriln than Paris. New French government officials visiting Brussels for the first time on 29 May appeared hesitant to take the big federalist leap that Germany and others in the European Union were asking for, in return for greater solidarity within the euro zone.
