EU prepares for ‘new stage’ in economic union

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This article is part of our special report Europe’s Industry : Halting the Decline.

European leaders will discuss plans for deeper economic integration in the euro zone at their next meeting in June, after an inconclusive summit yesterday (23 May) saw open divergences between France and Germany over how to restore the EU’s sluggish economic growth. 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 said “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 divergences 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 also 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 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.”

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