* EU's Barroso presents "blueprint" for overhauling euro
* Document revives idea of jointly issued euro zone bonds
* Proposals cover similar ground to Van Rompuy report
* EU leaders will discuss monetary union at Dec. 13-14
By Luke Baker
BRUSSELS, Nov 28 The European Commission
unveiled plans for a fundamental overhaul of how the euro zone
is structured on Wednesday, including the prospect of setting up
a common budget for the single currency area and issuing joint
debt in the years ahead.
In a five-page document dubbed a 'blueprint' for creating a
"deep and genuine" economic and monetary union, Commission
President Jose Manuel Barroso acknowledged that the 17 countries
in the euro zone needed to be allowed to integrate more deeply
and at a faster rate than the rest of the 27-country bloc.
In that respect, he breached a taboo over a "two-speed
Europe", saying that without allowing it to happen, it would not
be possible to create a stronger and more stable euro zone. He
also said much tighter oversight of economies was necessary.
"In a deep and genuine economic and monetary union, all
major economic and fiscal policy choices by member states would
be subject to deeper coordination, endorsement and surveillance
at the European level," Barroso told reporters, adding later:
"The euro area must be able to integrate quicker and deeper
than the EU at large."
Barroso set out his proposals in three timeframes: those
that can be tackled in the next six to 18 months; those that
will take 18 months to five years; and those that will only be
achieved from 2018 on, in the final stage of monetary union.
Many of the short-term ideas have been under discussion for
several months or are already being implemented after they were
presented by European Council President Herman Van Rompuy in
October and endorsed by the EU's leaders.
Van Rompuy's report, entitled "Towards a genuine economic
and monetary union" and involving contributions from Barroso,
European Central Bank President Mario Draghi, and the president
of euro zone finance ministers, Jean-Claude Juncker, set out a
plan to create a banking and fiscal union for the euro zone.
It also raised the need to establish an "economic union",
with closer integration of the single market, and a "political
union", with more democratic accountability, if the EU was to
form a more stable and enduring currency and economic bloc.
EURO AREA BONDS AGAIN
Barroso's 'blueprint' has not veered far off Van Rompuy's
template, but has made some amendments and additions, including
the idea of a "convergence and competitiveness instrument"
inside the EU budget which would be used to help countries
implement structural reforms.
But it is in his longer-term vision that Barroso made more
radical proposals, reviving ideas that were raised at the peak
of the debt crisis in 2011 and earlier in 2012, but were firmly
opposed by Germany and largely suppressed as a result.
Those ideas include the joint issuance of bonds by euro zone
countries, a process that would effectively involve the 17
member states underwriting one another's obligations.
"A deeply integrated economic and fiscal governance
framework could allow for the common issuance of public debt,
which would enhance the functioning of the markets and the
conduct of monetary policy," Barroso said.
"This would be the final stage in EMU."
At a news conference, Barroso was asked why he was putting
forward his own ideas for overhauling economic and monetary
union when he was already supposed to be working with Van Rompuy
and others on a nearly identical set of proposals.
He dismissed the suggestion that he was launching a
competing vision, saying that under the EU's treaties, it is the
European Commission that has the power to initiate legislation
and it was merely fulfilling that long-established mandate.
Still, for investors and those wanting the EU to present a
clear, unified set of policies after years of messy
decision-making during the crisis, there is a risk Barroso's
vision may appear to either compete with or cloud out Van
Any differences of opinion will have to be resolved in the
next two weeks, since Van Rompuy's next update on progress
towards a banking and fiscal union will be presented to EU heads
of state and government at a summit on Dec. 13-14.