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

Lesotho Faces New Round of Violence, Political Crisis

Brutal killing of military officer has sent former leaders back into S. Africa where they're watching anxiously as regional officials head in to try to restore peace More

Video US Diplomat Expects Adoption of Bosnian Massacre Anniversary Resolution

Samantha Power says there's broad consensus about killings in Bosnia's war, but Russia calls resolution 'divisive,' backs UN countermeasure More

UN Report Exposes Widespread Boko Haram Atrocities

Damning report graphically details pattern of vicious, widespread atrocities committed by Islamist militants 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.
Olympics Construction Scars Sacred Korean Mountaini
X
July 02, 2015 4:10 AM
Environmentalists in South Korea are protesting a Winter Olympics construction project to build a ski slope through a 500-year-old protected forest. Brian Padden reports that although there is strong national support for hosting the 2018 Pyeongchang Winter Olympics, there are growing public concerns over the costs and possible ecological damage at the revered mountain.
Video

Video Olympics Construction Scars Sacred Korean Mountain

Environmentalists in South Korea are protesting a Winter Olympics construction project to build a ski slope through a 500-year-old protected forest. Brian Padden reports that although there is strong national support for hosting the 2018 Pyeongchang Winter Olympics, there are growing public concerns over the costs and possible ecological damage at the revered mountain.
Video

Video Xenophobia Victims in South Africa Flee Violence, Then Return

Many Malawians fled South Africa early this year after xenophobic attacks on African immigrants. But many quickly found life was no better at home and have returned to South Africa – often illegally and without jobs, and facing the tough task of having to start over. Lameck Masina and Anita Powell file from Johannesburg.
Video

Video Family of American Marine Calls for Release From Iranian Prison

As the crowd of journalists covering the Iran talks swells, so too do the opportunities for media coverage.  Hoping to catch the attention of high-level diplomats, the family of American-Iranian marine Amir Hekmati is in Vienna, pleading for his release from an Iranian prison after nearly 4 years.  VOA’s Heather Murdock reports from Vienna.
Video

Video UK Holds Terror Drill as MPs Mull Tunisia Response

After pledging a tough response to last Friday’s terror attack in Tunisia, which came just days before the 10th anniversary of the bomb attacks on London’s transport network, British security services are shifting their focus to overseas counter-terror operations. VOA's Henry Ridgwell has more.
Video

Video Obama on Cuba: This is What Change Looks Like

President Barack Obama says the United States will soon reopen its embassy in Cuba for the first time since 1961, ending a half-century of isolation. VOA White House correspondent Luis Ramirez reports.
Video

Video Hate Groups Spread Influence Via Internet

Hate groups of various kinds are using the Internet for propaganda and recruitment, and a Jewish human rights organization that monitors these groups, the Simon Wiesenthal Center, says their influence is growing. The messages are different, but the calls to hatred or violence are similar. VOA's Mike O’Sullivan reports.
Video

Video US Silica Sand Mining Surge Worries Illinois Residents, Businesses

Increased domestic U.S. oil and gas production, thanks to advances known as “fracking,” has created a boom for other industries supporting that extraction. Demand for silica sand, used in fracking, could triple over the next five years. In the Midwest state of Illinois, people living near the mines are worried about how increased silica sand mining will affect their businesses and their health. VOA’s Kane Farabaugh has more in this first of a series of reports.
Video

Video Blind Somali Journalist Defies Odds in Mogadishu

Despite improving security in the last few years, Somalia remains one of the most dangerous countries to be a journalist – even more so for someone who cannot see. Abdulaziz Billow has the story of journalist Abdifatah Hassan Kalgacal, who has been reporting from the Somali capital for the last decade despite being blind.
Video

Video Texas Defies Same-Sex Marriage Ruling

Texas state officials have criticized the US Supreme Court decision giving same-sex couples the right to marry nationwide. The attorney general of Texas says last week's decision did not overrule constitutional "rights of religious liberty," and therefore officials performing wedding services can refuse to perform them for same-sex couples if it is against their religious beliefs. Zlatica Hoke reports on the controversy.
Video

Video Rabbi Hits Road to Heal Jewish-Muslim Relations in France

France is on high alert after last week's terrorist attack near the city Lyon, just six months after deadly Paris shootings. The attack have added new tensions to relations between French Jews and Muslims. France’s Jewish and Muslim communities also share a common heritage, though, and as far as one French rabbi is concerned, they are destined to be friends. From the Paris suburb of La Courneuve, Lisa Bryant reports about Rabbi Michel Serfaty and his friendship bus.
Video

Video Saudi Leaks Expose ‘Checkbook Diplomacy’ In Battle With Iran

Saudi Arabia’s willingness to wield its oil money on the global diplomatic stage appears to have been laid bare, after the website WikiLeaks published tens of thousands of leaked cables from Riyadh’s Ministry of Foreign Affairs. VOA's Henry Ridgwell reports.
Video

Video In Kenya, Police Said to Shoot First, Ask Questions Later

An organization that documents torture and extrajudicial killings says Kenyan police were responsible for 1,252 shooting deaths in five cities, including Nairobi, between 2009 and 2014, representing 67 percent of all gun deaths in the areas reviewed. Gabe Joselow has more from Nairobi.

VOA Blogs