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Schäuble, Draghi Seek Greater European Integration

by Ulrika Lomas, Tax-News.com, Brussels

24 July 2012


President of the European Central Bank (ECB) Mario Draghi and German Finance Minister Wolfgang Schäuble have insisted that one of the lessons to be drawn from the sovereign debt crisis in the eurozone is the need to strengthen European political integration.

Their recent comments follow hot on the heels of an agreement reached by the Eurogroup on conditions for according European financial assistance to recapitalize Spain’s banks.

In an interview with French newspaper Le Monde, the ECB president said that movement towards a financial, budgetary and political union is “inevitable” and will lead “to the creation of new supranational entities”.

While acknowledging that in some countries the transfer of sovereignty is perceived as a major challenge, Draghi explained that with globalization, it is precisely by sharing sovereignty that countries are better able to preserve it. In the long-term, the euro has to be founded on greater integration, he stressed.

Echoing these views, German Finance Minister Wolfgang Schäuble underlined the need in an interview with Le Figaro to continue work towards that which was not feasible at the time of the creation of the euro, namely closer cooperation in the area of economic and financial policy. In other words a stronger political union, involving treaty changes, the minister added, noting that although this was already clear at the time, it was not possible.

Such a union will not be founded on either the German or the French model, the minister pledged, but rather a complex alchemy founded on a combination of the diverse cultures in Europe.

Rejecting the idea of a European super state, and of more European bureaucracy, Schäuble insisted that something new should be created, with a new distribution of powers among the member states of the union. The aim is a Europe capable of acting in all areas where there is common interest, notably as regards monetary, economic and financial policy, Schäuble concluded.

TAGS: tax | economics | fiscal policy | budget | currency | European Union (EU) | Europe

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