| BRUSSELS, March 28
BRUSSELS, March 28 Portugal has presented
proposals for closer economic coordination between the countries
of the euro zone as the bloc tries to put crises over Greece and
other big debtor states behind it.
EU ministers will study the Portuguese discussion paper,
entitled "The Missing Piece in the Economic and Monetary Union
Puzzle: Economic Policy Coordination", ahead of a summit of
leaders in June at which they are expected to outline plans to
strengthen the single currency area over coming years.
The paper carries weight not least because Portugal has been
among those euro zone states obliged to adjust policy in return
for an international bailout following the 2008 global crisis.
Lisbon is now among the toughest critics of the new Greek
government's drive to ease the terms of its own bailout.
Among the Portuguese proposals is a common unemployment
benefit scheme for the zone. That could help balance out the
fiscal effects of different economies being bound by the same
monetary policy due to sharing the single currency.
Geographically isolated, like Greece, from the core of the
currency bloc, Portugal would also like states to benefit under
euro zone budget rules from investments which produce spinoff
gains for others - Lisbon, for example, wants more cross-border
"Member States need to recognise that cross-border
coordination creates positive spillover effects and that in the
case of structural reform ... a valid constituency exists beyond
their borders," read the Portuguese paper, seen by Reuters.
Current euro zone rules oblige governments to meet targets
for public sector deficits which give special credit for efforts
to make reforms to the underlying structure of their economies.
"Economic policies and structural reforms with significant
spillover or coordination 'dividend' or, more generally, which
promote greater policy convergence, could benefit from adequate
incentives from fiscal guidance at the EU level," Portugal said.
The paper proposes that such reform efforts be measured
against the aggregate budget stance of the bloc rather than of
one state. It also said efforts to create a single market in
digital services should be recognised in monetary union rules.
It gave little detail on its suggested unemployment
insurance scheme. Several proposals made by other countries last
year included a shared budget for funds that could help
countries in a downturn with the costs of unemployment benefit
in exchange for contributions when they were doing well.
(Writing by Jan Strupczewski; Editing by Gareth Jones)