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Journalism of Courage
Top European officials have called on countries that use the euro to surrender more control over their national budgets,a move apparently aimed at easing Germanys fears of sharing debt burdens with struggling governments like Spain or Italy. The plan is meant to be a grand vision to save the euro currency from financial disaster and to set up negotiations between leaders at a key EU summit on Thursday.
Germany,Europes biggest and strongest economy,is increasingly isolated in its refusal to quickly adopt measures such as jointly issued eurobonds,which would see it take on some of the debt risk of financially weak countries.
Some experts say such debt-sharing is what Europe needs to end its crisis as it would help defuse the prospect of unaffordable bailouts for Spain or Italy.
But Germany is worried that such debt-sharing would tempt financially weak countries to spend irresponsibly once again and not reform their economies. Reassuring Berlin that governments would face tough oversight of their budgets would be key to easing Germanys resistance to debt-sharing.
What is at stake is…the overall confidence in the euro area,and indeed in our commitment to the European project, European Commission President Jose Manuel Barroso told reporters in Brussels. For a genuine economic and monetary union to be established,I think we need a banking union,a fiscal union,and further steps toward a political union.
The plan was was drawn up by the gang of four top European officials: Barroso along with Council President Herman Van Rompuy,Eurogroup President Jean-Claude Juncker and European Central Bank President Mario Draghi.
It is doubtful whether euro zone governments will be willing to cede control over their budgets and whether citizens of European countries would accept the idea even if their leaders sign off on the idea.
The plan is to be debated by leaders from around Europe at a summit in Brussels Thursday and Friday that takes place against a backdrop of financial strains that are threatening to shatter the single currency.
