European Union Energy Commissioner Gunther Oettinger called for a “common political approach’’ and economic policy coordination to deal with Europe’s spreading debt crisis in an interview with CNBC, saying, “We need a United States of Europe.’’
Oettinger, speaking on the sidelines of an OPEC meeting in Vienna, said European leaders need to act quickly and as a “common European team’’ to avert financial contagion, He called for “concrete proposals’’ at the summit of European leaders to be held June 28-29, according to CNBC.com.
European institutions realize their “obligations’’ to “coordinate economic policies’’ and the region needs to “harmonize taxation,’’ he told CNBC Wednesday. He said "there is no “Plan B'" for the eurozone.
Oettinger said he expects German Chancellor Angela Merkel and French President Francois Hollande to coordinate more closely after the French parliamentary elections this weekend. He defended Merkel’s handling of the crisis.
Oettinger said the temporary Emergency Financial Stability Fund, or EFSF, would function “one year longer than planned’’ and that common euro bonds should come “afterwards.’’ He reiterated the German position that such bonds would prove a disincentive for nations to make needed structural reforms.
He said the EFSF’s permanent successor, the European Stability Mechanism, would provide up to 500 billion euros ($628 billion) of backing for struggling European governments once it is up and running July 1, CNBC reported.
Oettinger said he would prefer a Greek vote this weekend to remain in the monetary union, but that it was ultimately up to the voters.
German Finance Minister Wolfgang Schaeuble, meanwhile, said Italians must accept Prime Minister Mario Monti's tough economic measures to avoid becoming the next victim of the eurozone debt crisis after an announced bailout for Spain's banks failed to ease markets, Reuters reported.
Italy, the eurozone's third biggest economy, paid nearly 4 percent to sell one-year treasury bills at auction Wednesday, a six-month high, as fears mounted over its ability to keep servicing its debt. At 1.9 trillion euro ($2.4 trillion), Italy’s public debt is equivalent to 120 percent of gross domestic product, a ratio second only to Greece.
Schaeuble said Italy had made great strides under Monti's government, which launched pension and labor market reforms and other austerity measures since replacing Silvio Berlusconi's scandal-ridden administration in November, Reuters reported.
"If Italy continues along Monti's path there will be no risks," Schaeuble said in an interview with La Stampa daily. "I can only hope that political forces in the Italian parliament and public opinion continue to decisively back him,’’ he said.
“The road towards a return to sustainable growth through structural reforms, improved competitiveness and a lower deficit is the right one."
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