Eurozone Leaders Eye Development of 'Stability Union' Without Treaty Change
November 28, 2011
Media outlets including Reuters, FT, and WSJ are reporting that Eurozone countries are considering a plan to create what is being called a “Stability Union” that would speed up the integration of their fiscal policies including the ability for the overruling of any country’s national budget that would breach EU rules.
The plan, which could be announced before the EU summit on December 9th, would quickly give Brussels new powers to enforce fiscal discipline in the Eurozone. There is speculation that the new plan would provide the impetus for the ECB to take on a more aggressive role in the sovereign debt crisis.
The German Finance Ministry said in a statement Monday, “We are working intensively for the creation of a Stability Union." The statement added, "That is what we want to secure through treaty changes, in which we propose that the budgets of member states must observe debt limits."
Reuters notes that the new Stability Union would not come about via a change in the EU treaty as treaty changes would take far too long to implement. According to Reuters, the precedent for the near-term plan is the Schengen agreement, which allows the citizens of the countries that choose to take part uninhibited cross border travel. Reuters noted that another potential option would be to have a purely Franco-German mini-agreement along the lines of the Elysee treaty of 1963 that other Eurozone countries could also participate in.
The Stability Union would be purportedly be implemented at a later stage and could pave the way for the issuance of Eurobonds.
Stock markets around the globe have rallied furiously on the hope that the leaders of the Eurozone will soon make progress toward ending the credit contagion that has now spread from Greece to Italy and Spain.
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Sounds like a crock of you-know-what from the same liers that have bounced markets up all too many times over the last few months. (Stability Union idea based on the part in the treaty concerning uninhibited corss-border travel doesn't pass the laugh test, does it?)