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EU leaders debate closer economic integration - 13/12/2012

EU leaders

EU presidents and prime ministers will find the European commission’s vision for closer economic, monetary and banking union on the table when they sit down to their customary end-of-year meeting in Brussels on 13 and 14 December.

Following an agreement between finance ministers in the early hours of 13 December, leaders will be asked to give the green light to banking union, which will see the European Central Bank (ECB) having direct oversight of eurozone banks.

The transfer power from national governments to the ECB has already been approved by national finance ministers. If their bosses – EU leaders – endorse the plan, the system could be up and running in January 2014.

The European commission is also placing the EU blueprint for closer union on the agenda. Launched in November, it maps a path to full economic, monetary, budgetary and political integration. Closer coordination here would help ensure that responses to EU-wide economic problems are coordinated and so more effective.

The plan urges the EU to do three things over the next 18 months:

  • implement reforms already agreed – or in the pipeline – on better economic and budgetary governance
  • agree on rules for intervening when banks are struggling financially

When he addresses the EU’s heads of state and government in Brussels, Commission president José Manuel Barroso will emphasise the need for urgent action on his blueprint.

He will urge EU countries to continue with their reforms, and their leaders to take decisions on key initiatives, such as on banking union.

President Barroso will also ask EU leaders to agree on a path towards economic and monetary union. The commission would like to see this written into the basic EU treaties, so the blueprint proposes treaty changes. Any new arrangement would need to balance economic discipline and responsibility with solidarity.

The blueprint explains that countries signing up to economic and monetary union must act faster and more decisively than the EU at large, whilst staying true to policies affecting all 27 EU countries.

The meeting on 13 and 14 December will also address applications for EU membership, foreign policy issues and defence. The commission is currently looking into making Europe’s defence sector more efficient and competitive.

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