Brussels, 22/06/2012 (Agence Europe) - In Rome on Friday 22 June, Germany, Spain, France and Italy said that the euro was irreversible and they would be using all the “mechanisms” at their disposal to ensure its stability. The leaders of the four biggest eurozone economies expressed generalities because they disagree on the details, but they said that some €130 billion (1% of EU27 GDP) was available for growth stimulus measures and said they were determined to introduce a financial transaction tax (FTT) with other European countries by making use of the enhanced cooperation mechanism (see separate article).
The German chancellor, Angela Merkel, said that more Europe was needed, including greater political union within the eurozone, and she called for greater solidarity along with greater controls at EU level to ensure rules were properly respected. She pointed out that there was a single currency with 17 different parliaments and the euro will not be properly managed until sovereignty is transferred to Brussels. The Italian prime minister, Mario Monti, said that the European summit on 28-29 June should make it clear how economic, financial, bank, currency and budget integration can be boosted in the medium-term in order to show the markets “the euro is here to stay”.
The Spanish prime minister, Mariano Rajoy, said the politicians agreed on several areas like the need to keep a cap on deficits and debt, structural reforms at national and European level to introduce greater flexibility into the economy, the desire to deepen economic and monetary union in the field of banking and the budget, and a desire to pull out the stops to ensure the euro is irreversible. In order to cut the cost of borrowing for countries that are introducing reforms but coming under pressure from the markets, he said the bailout funds could buy up sovereign debt and the ECB could intervene in certain circumstances. The French president, François Hollande, said that France had not dropped the idea of introducing eurobonds to pool a share of excess debt in the eurozone, despite recent statements by the French prime minister, Jean-Marc Ayrault, that eurobonds would never see the light of day and would require a transfer of power to Brussels. Hollande said there would not be a transfer of sovereignty to Brussels without greater solidarity. He put great emphasis on growth stimulus, saying there was €130 billion of EU funding to this end.
Highlighting the importance of sticking to the rules, Monti was delighted that the four leaders had called for more Europe in the Italian capital, where Europe had been created in the first place. “All roads lead to Rome”, he added. (MB/transl.fl)