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

Multimedia Social Media Documenting, Not Driving, Hong Kong Protests

Unlike in Arab Spring uprisings, pro-democracy protesters in Hong Kong aren't relying on Twitter and Facebook to organize, but social media still plays a role More

Analysis: Occupy Central Not Exactly Hong Kong’s Tiananmen

VOA's former Hong Kong, Beijing correspondent compares and contrasts 1989 Tiananmen Square protest with what is now happening in Hong Kong More

Bambari Hospital a Lone Place of Help in Violence-Plagued CAR

Only establishment still functioning in CAR's second city is main hospital 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.
The Legacy of Jimmy Carter: The Preacher from Plainsi
X
October 01, 2014 10:45 AM
It is common in the United States to see tourists flock to sites associated with America's presidents. Some are privately owned and others are run by the National Park Service or the National Archives -- but most have helped draw business and people into the towns and cities where they are located. As VOA’s Kane Farabaugh reports, there is one particular presidential hometown that is unique in what it has to offer those who make the trip.
Video

Video The Legacy of Jimmy Carter: The Preacher from Plains

It is common in the United States to see tourists flock to sites associated with America's presidents. Some are privately owned and others are run by the National Park Service or the National Archives -- but most have helped draw business and people into the towns and cities where they are located. As VOA’s Kane Farabaugh reports, there is one particular presidential hometown that is unique in what it has to offer those who make the trip.
Video

Video Hong Kong Protests Draw New Supporters on National Holiday

On the 65th anniversary of the founding of Communist China, Hong Kong protesters are hoping to stage the largest pro-democracy demonstration since the 1989 Tiananmen protests. VOA's Brian Padden visited one of the protest sites mid-day, when the atmosphere was calm and where the supporters were enthusiastic about joining what they are calling the umbrella revolution.
Video

Video India's PM Continues First US Visit

India's prime minister is on his first visit to Washington, to strengthen political and economic ties between the world's oldest and the world biggest democracies. He came to the U.S. capital from New York, the first stop on his five-day visit to the country that denied him an entry visa in the past. From Washington, Zlatica Hoke reports Modi seemed most focused on attracting foreign investment and trade to increase job opportunities for his people.
Video

Video Malaysia Struggles to Stop People Joining Jihad

Malaysian authorities say militant groups like the so-called "Islamic State" have used social media to entice at least three dozen Malaysian Muslims to fight in what they call "jihad" in Syria and Iraq. As Mahi Ramkrishnan reports from Kuala Lumpur, counterterrorism police are deeply worried about what could happen when these militants return home.
Video

Video Could US Have Done More to Stop Rise of Islamic State?

President Obama says airstrikes against Islamic State militants in Syria will likely continue for some time because, in his words, "there is a cancer that has grown for too long." So what if President Obama had acted sooner in Syria to arm more-moderate opponents of both the Islamic State and the Syrian government? VOA State Department Correspondent Scott Stearns reports from the United Nations.
Video

Video Treasure Hunters Seek 'Hidden Treasure' in Central Kenya

Could a cave in a small village in central Kenya be the site of buried treasure? A rumor of riches, left behind by colonialists, has some residents dreaming of wealth, while others see it as a dangerous hoax. VOA's Gabe Joselow has the story.
Video

Video Ebola Patients Find No Treatment at Sierra Leone Holding Center

At a holding facility in Makeni, central Sierra Leone, dozens of sick people sit on the floor in an empty university building. They wait in filthy conditions. It's a 16-hour drive by ambulance to Kailahun Ebola treatment center. Adam Bailes was there and reports on what he says are some of the worst situations he has seen since the beginning of this Ebola outbreak. And he says it appears case numbers may already be far worse than authorities acknowledge.
Video

Video Identifying Bodies Found in Texas Border Region

Thousands of immigrants have died after crossing the border from Mexico into remote areas of the southwestern United States in recent years. Local officials in south Texas alone have found hundreds of unidentified bodies and buried them in mass graves in local cemeteries. Now an anthropologist and her students at Baylor University have been exhuming bodies and looking for clues to identify them. VOA’s Greg Flakus has more from Waco, Texas.
Colonel Steve ‘Spiros’ Pisanos left Greece and came to the U.S. to learn to fly. He flew fighters for the Allies in World War II, narrowly escaping death multiple times.Colonel Steve ‘Spiros’ Pisanos left Greece and came to the U.S. to learn to fly. He flew fighters for the Allies in World War II, narrowly escaping death multiple times.

AppleAndroid