Brussels charts path towards ‘deep and genuine’ economic union

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The European Commission proposed new ways on Wednesday (20 March) to coordinate eurozone economic policies, together with a cash incentive for change, as part of a plan to create an economic union to complement the single currency.

The Commission said eurozone states should discus important reforms with others in the single currency area before making the final decision to go ahead.

"Plans for the most important economic policy reforms [should be] assessed and discussed at EU level before final decisions are taken at the national level," the EU executive said in a statement outlining the proposed reforms.

"In this process, the Commission and Council of Ministers can suggest changes to the plans," the Commission added, in proposals likely to generate criticism from those defending national sovereignty over economic issues.

Special focus should be given to coordinating reforms concerning competitiveness, employment, product and services markets, network industries and tax systems, among others.

"That way, any positive or negative spillovers of the reforms on other EU countries can be properly taken into account early on in the decision-making process," the Commission said.

The EU executive arm also proposed to create a Competitiveness and Convergence Instrument (CCI).

This would allow the Commission to sign a contract with a eurozone government in which the country would commit to certain reforms and deadlines by which they would happen in return for financial support for the implementation of the changes, like for training or "active labour market policies".

The proposals are in line with what EU leaders asked for at their summit last December and will be discussed in more detail at their next meeting in June.

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