Italy’s Padoan calls for tighter eurozone integration

Pier Carlo Padoan at the Lisbon Council, 20 April 2011 [Photo: Lisbon Council / Flickr]

Pier Carlo Padoan at the Lisbon Council. 20 April, 2011 [Lisbon Council / Flickr]

The eurozone needs deeper integration to remove the risk of a member country leaving the single currency, Italian Economy Minister Pier Carlo Padoan told the Financial Times in an interview on Sunday (26 July).

The Greek crisis has called into question the future of the currency bloc as a third bailout of the heavily indebted country narrowly avoided the risk of Athens crashing out of the euro.

“The exit and therefore the end of irreversibility is now an option on the table. Let’s not fool ourselves,” Padoan said in the interview posted on the newspaper’s website.

“Some believe that the way it works is more or less fine with minor adjustments. I think this is not enough,” he said.

Padoan’s comments came days after a report in German magazine Der Spiegel that Germany was willing to discuss the creation of a eurozone finance minister who would have his own budget and the power to raise extra taxes.

European Commission President Jean-Claude Juncker last month laid out a vision for tighter joint control over the currency zone’s economies, including an eventual common eurozone treasury.

>> Read: EU’s ‘Five Presidents’ lay out eurozone vision, with timetable

Italy has long advocated tighter economic and political integration in the currency bloc.

To strengthen the single currency, Italy wants a wide set of measures including the swift completion of banking union, the establishment of a common eurozone budget and a common unemployment insurance scheme.

At the eurozone summit of 24 October 2014, the presidents of the European Commission, the Council, the Eurogroup, the European Parliament and the European Central Bank were invited to combine their efforts to prepare the "next steps for a better economic governance in the euro area".

A first draft, carefully presented as an "analytical note", was discussed by EU leaders at a summit in February.

>> Read: Juncker sparks debate about a core eurozone union

But the document contained more questions than answers and failed to trigger much debate. The discussion continued in June with the publication of a report by the five presidents, which proposed threes stages, until 2025, to deepen integration among eurozone countries.

>> Read: EU's 'Five Presidents' lay out eurozone vision, with timetable

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