BRUSSELS (Reuters) - Euro zone countries may have to pool some sovereignty if they want to secure their monetary union, one of the European Union’s top officials said on Tuesday, in remarks that could send a shudder through the bloc’s weaker states.
European Council President Herman Van Rompuy, who chairs meetings of euro zone and EU leaders, said without much closer integration of economic policies among the euro zone, a degree of doubt would always surround the 13-year-old single currency.
“The euro zone has to move toward real economic union commensurate with monetary union,” Van Rompuy said in a speech to a conference held by a think tank in Brussels.
“We need to give both our citizens and the markets a clear message about the irreversibility of the euro,” he said.
To achieve that, it would mean the 17 countries that use the currency sacrificing a degree of sovereignty to give the monetary union the strongest-possible underpinings.
“This will imply in some of these areas a pooling of sovereignty in exchange for a stronger, more stable monetary union,” he said.
The remarks will cause consternation in some member states, where there is a deep aversion to the prospect of surrendering more sovereignty to Brussels. There are already proposals from the European Commission for much tighter oversight of member states budgets, including fines for the wayward.
“(Deepening economic union) will require a combination of two things, a significant strengthening of our rules and mechanism for fiscal responsibility and a large step in terms of integration in economic policies,” Van Rompuy said.
“This will imply in some of these areas a pooling of sovereignty in exchange for a stronger, more stable monetary union.”
While giving up any amount of autonomy is a challenge, Germany, which has had to foot much of the bill for rescuing three euro zone countries and building a rescue fund to help others, is determined to have stricter oversight.
Four countries -- Ireland, Portugal, Greece and Italy -- are already being closely monitored by officials from the European Commission and the International Monetary Fund, although Italy, unlike the others, is not receiving financial aid.
“We have to fight for our economic and monetary union ... And Europe’s place in the world,” Van Rompuy told the Lisbon Council think tank. “In Italy, it is an hour of truth.”
Reporting By John O'Donnell