Eurozone crisis

“Maastricht 2” to save Spain and Cyprus?

Published on 4 June 2012 at 10:37


Rapid degradation of the crisis in Spain and the news that Nicosia is about to ask the EU for financial aid, are forcing EU bureaucrats to accelerate the preparation of a medium-term timetable to reinforce economic integration, leading to budgetary and banking union, writes Lisbon economic newspaperDiário Económico.

There are rumors of a "Maastricht 2", a sequel to the treaty that laid the foundations of the single currency, which may be agreed at the summit of 28 and 29 June, following a proposal from the European Council Chairman Herman Van Rompuy.

This week the European Commission will formalize its proposal for a resolution for banks, a key step for the bank union that would allow the bank to self-finance future bailouts without recourse to taxpayer money. Other steps planned by Van Rompuy would include a guarantee fund of deposits at European level, a strengthening of banking supervision. But also the creation of a European budgetary authority, as suggested by the Spanish leader Mariano Rajoy on Saturday, which could include a European finance minister, a proposal that [former ECB head] Jean-Claude Trichet made a year ago.

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Diário Económico also adds that —

Angela Merkel aims to strengthen the powers of European institutions, in a centralisation of powers, and loss of sovereignty, and also a tighter coordination to ensure a labour market reform, social security and tax policy. Only then, Berlin seems to be willing to reconsider its opposition to Eurobonds, and only when the process is finished.

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