E.U. Cautions France and Warns of Challenges in Spain
Source: NY Times
The European Commission sought Wednesday to push countries in the euro zone toward greater integration, including the use of common bonds and creation of a banking union, even as it prodded national capitals to live up to the budget rules they had already agreed on, taking a hard line on France while offering more time to Spain.
José Manuel Barroso, the president of the commission, said it was important for euro zone countries to send a signal to markets now to restore investor confidence, even if such plans still could be a long way off.
“For full confidence in the future of the euro area, it is important that member states agree to launch a process toward more integration — financial and economic integration,” Mr. Barroso said. “The pace and sequencing of all these developments will need to be worked out, including a road map and a timetable, but an early confirmation of the steps to be taken will underscore the irreversibility and the solidity of Europe.”
Mr. Barroso said that those steps should include at some point a full-fledged “banking union,” including supervision and deposit guarantees, and that direct recapitalization of banks using European rescue funds, like the European Stability Mechanism, might be possible. He noted that member states that had once rejected such ideas out of hand were now more prepared to consider them since the worsening of the crisis — particularly in the Spanish banking sector.
Read more: http://www.nytimes.com/2012/05/31/business/global/european-union-cautions-france-on-overspending-and-warns-of-challenges-in-spain.html?pagewanted=all
