EU unveils blueprint to reinforce economic governance
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The European Commission on Wednesday unveiled a blueprint to reinforce economic governance in the European Union (EU), aiming to avoid a repeat of the Greek debt crisis through tighter budgetary rules and economic surveillance.
"Europe has dealt with the immediate emergency. Today, the commission sets out what we need to do to strengthen Europe's economic governance," Commission President Jose Manuel Barroso said.
To reinforce economic governance, the European Commission proposed to strengthen the functioning of the Stability and Growth Pact and extend surveillance to macro-economic imbalances.
It also proposed to align national budget and policy planning through the establishment of a "European Semester" for economic policy coordination, so that EU member states would benefit from early coordination at European level as they prepare their national budgets and national reform programmes.
"Coordination of fiscal policy has to be conducted in advance, in order to ensure that national budgets are consistent with the European dimension, that they don't put at risk the stability of the other member states," European Commissioner for Economic and Monetary Affairs Olli Rehn said.
The Eureopan Commission said that provision of financial support to eurozone member states in serious financial distress is necessary to preserve the financial stability of the euro area in the medium and long term, adding that it also intended to make a proposal for a permanent crisis resolution mechanism in the medium-to-long term.
EU finance ministers agreed Monday on an unprecedented rescue mechanism in a desperate bid to prevent spreading of the Greek debt crisis to other indebted eurozone countries like Spain and Portugal. They also vowed to strengthen economic governance of the eurozone and the EU as a whole.
