News / Europe

European Leaders Call for Tighter Fiscal Control

Euro banknotesEuro banknotes
x
Euro banknotes
Euro banknotes
VOA News
Key European leaders are calling for much tighter central control of spending by the 17 countries that use the euro in the latest effort to resolve the continent's unrelenting debt crisis.

Four officials produced the plan Tuesday - European Council President Herman Van Rompuy, European Commission President Jose Manuel Barroso, Eurogroup President Jean-Claude Juncker and European Central Bank President Mario Draghi. They described the ability to "correct unsustainable fiscal policies" of the individual eurozone governments as "essential."

Barroso said fiscal discipline would be mandatory.

"In a more integrated economic and monetary union, sound fiscal positions will not be optional," said Barroso. "They will be non-negotiable. We propose to look at further steps that may require changes to the [European Union] treaty. Let me tell you here that fiscal union is about much more than just eurobonds or stability bonds. It also means more coordination in taxation policy and a much stronger European approach to budgetary matters at national and European level."
 
The seven-page plan appeared aimed at pushing economic powerhouse Germany toward closer, continent-wide fiscal integration, including the eventual sale of jointly issued eurobonds supported by the currency bloc as a whole, rather than individual governments. But Germany has resisted the creation of eurobonds, fearing its borrowing costs would increase and that debt-ridden countries would have less incentive to resolve their financial problems.

Germany showed no sign of changing its position, with Deputy Foreign Minister Michael Link saying that pooling of debt would lead "toward a dead end."

The eurozone financial proposals came as the finance ministers of France, Germany, Italy and Spain were set for debt crisis talks Tuesday evening in Paris ahead of other key meetings this week.

The meeting of the finance chiefs is taking place on the eve of joint talks between French President Francois Hollande and German Chancellor Angela Merkel aimed at reaching some sort of accord before a crucial European Union summit begins Thursday in Brussels.

French Finance Minister Pierre Moscovici told a local radio network the eurozone has begun to move away from the idea of austerity as a means of solving the crisis that threatens the existence of the currency union.

"I will start with growth: on this aspect, the election of Francois Hollande really changed things in Europe," said Moscovici. "A growth pact has already been adopted, with our propositions, which represents 120  to 130 million euros.  These are the right steps.  There is also a pact that concerns banks: we have to set up  mechanisms for bank recapitalization which would allow them to face the difficulties of the banking system.  And there is integration, which in the end, in the long term, will lead to euro obligations."

The Paris meeting is taking place as two more eurozone nations, Spain and Cyprus, sought bailouts for their financially troubled banks.  

Spain is asking for up to $125 billion to rescue banks left holding bad real estate loans, while Cyprus says its banks are vulnerable because of their "large exposure" to the economy in nearby debt-ridden Greece.  Cypriot-held Greek government bonds were written down in value earlier this year.

In all, five countries have now sought rescue packages, including earlier bailouts for Greece, Ireland and Portugal.

In Washington, the White House says President Barack Obama spoke Monday with new Greek Prime Minister Antonis Samaras and congratulated him on his election.  Mr. Obama urged the prime minister to work closely with the European Union and International Monetary Fund in implementing Greece's economic reforms.

Mr. Samaras says he wants to renegotiate the terms of the two multi-billion-dollar EU and IMF bailouts for Greece, to extend the mandate for a budget surplus by two years to 2016.

He named a new finance minister for his fledgling government, Yannis Stournaras, an economics professor and head of a Greek think tank, after his first choice to be the finance chief resigned for health reasons.


Some information for this report was provided by AP, AFP and Reuters.

You May Like

At International AIDS Conference One Goal, Many Paths

The 12,000 delegates attending 20th International AIDS Conference in Melbourne have vastly different visions about how to eradicate disease More

Disasters May Doom Malaysia’s Flag Carrier

Even before loss of two jets loaded with passengers on international flights, company had been operating in red for three years, accumulating deficit of $1.3 billion More

Afghan Presidential Vote Audit Continues Despite Glitches

Process has been marred by walkouts by representatives of two competing candidates, Abdullah Abdullah and Ashraf Ghani More

This forum has been closed.
Comment Sorting
Comments
     
by: Observer from: Everywhere
June 26, 2012 3:50 PM
Greeks need to own their mistakes, they need to recognize they were reckless getting into the EU. Unless they own it they will not be able to see the path forward, and stop thinking someone pushed you into the troubles you dug in for yourselves. The fact is the previous national government messed it up for the youth and vulnerable, it's now time to work toward correcting those mistakes. Such as, raising retirement age to a mandatory 65 by the 2020, lower pension payments to (in order to encourage able people take part time job), implement tax reform and most importantly debt repayment plans. No one forced Greece to spend recklessly, learn from past mistakes and accept responsibilities for flawed Greek national character, cheating the system and tax-evasion.

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Nature of Space Exploration Enters New Agei
X
Elizabeth Lee
July 20, 2014 2:36 AM
Forty-five years ago this month, the first humans walked on the moon. It was during an era of the space race between the United States and the Soviet Union. World politics have changed since then and -- as Elizabeth Lee reports -- so has the nature of space exploration.
Video

Video Nature of Space Exploration Enters New Age

Forty-five years ago this month, the first humans walked on the moon. It was during an era of the space race between the United States and the Soviet Union. World politics have changed since then and -- as Elizabeth Lee reports -- so has the nature of space exploration.
Video

Video Chicago’s Argonne Lab Developing Battery of the Future

In 2012, the U.S. Department of Energy’s Office of Science awarded a $120 million grant to a new technology center focused on battery development - headquartered at Argonne National Laboratory in suburban Chicago, Illinois. As VOA’s Kane Farabaugh reports, there scientists are making the next technological breakthroughs in energy storage.
Video

Video In NW Pakistan, Army Offensive Causes Massive Number of Displaced

Pakistan’s army offensive in North Waziristan has resulted in the large-scale displacement of the local population. VOA's Ayaz Gul reports from northwest Pakistan where authorities say around 80 percent of the estimated 1 million internally displaced persons [IDPs] have settled in Bannu district, while much of the remaining 20 percent are scattered in nearby cities.
Video

Video Kurdish Peshmerga Force Secures Kirkuk, Its Oil

The Kurdistan regional government has sent its Peshmerga troops into the adjacent province of Kirkuk to drive out insurgents, and to secure the area's rich oil fields. By doing this, the regional government has added a fourth province to the three it officially controls. The oil also provides revenue that could make an independent Kurdistan economically strong. VOA’s Jeffrey Young went out with the Peshmerga and filed this report.
Video

Video Malaysia Reeling: Second Air Disaster in Four Months

Malaysia is reeling from the second air disaster in four months involving the country’s flag carrier. Flight 340 vanished in March and despite an extensive search, no debris has been found. And on Thursday, Flight 17, likely hit by a surface-to-air missile, came apart over eastern Ukraine. The two incidents together have left more than 500 people dead. VOA Correspondent Steve Herman reports from Kuala Lumpur.
Video

Video Diplomatic Crisis Grows Over MH17 Plane Crash

The Malaysia Airlines crash in eastern Ukraine is drawing reaction from leaders around the world. With suspicions growing that a surface-to-air missile shot down the aircraft, there are increasing tensions in the international community over who is to blame. Henry Ridgwell reports for VOA from London.
Video

Video Undocumented Immigrants Face Perilous Journey to US, No Guarantees

Every day, hundreds of undocumented immigrants from Central America attempt the arduous journey through Mexico and turn themselves over to U.S. border patrol -- with the hope that they will not be turned away. But the dangers they face along the way are many, and as Ramon Taylor reports from the Rio Grande Valley in Texas, their fate rests on more than just the reception they get at the US border.
Video

Video Scientists Create Blackest Material Ever

Of all the black things in the universe only the infamous "black holes" are so black that not even a tiny amount of light can bounce back. But scientists have managed to create material almost as black, and it has enormous potential use. VOA’s George Putic has more.
Video

Video Fog Collector Transforming Maasai Water Harvesting in Kenya

The Maasai people of Kenya are known for their cattle-herding, nomadic lifestyle. But it's an existence that depends on access to adequate water for their herds and flocks. Lenny Ruvaga reports for VOA, on a "fog collector."

AppleAndroid