EU Contemplating Separate Budget For Eurozone: Report
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The 27-member-strong European Union are presently discussing the possibility of developing a secondary budget – separate from the regular E.U. budget – for the 17 members that share the common euro currency, said a report by the Financial Times Deutschland (FTD) on Sunday.
The 27-member-strong European Union are presently discussing the possibility of developing a secondary budget – separate from the regular E.U. budget – for the 17 members that share the common euro currency, said a report by the Financial Times Deutschland (FTD) on Sunday.
The report, as cited by Reuters, claimed that the new eurozone budget could provide an additional 20 billion euros to the region, on top of the 130 billions euro a year currently allocated for the 27 countries.
“The budget for the whole European Union currently totals around 130 billion euros a year, which is just over 1 percent of EU economic growth,” wrote FTD.
[quote]”A euro zone budget of around 20 billion euros would mean extra costs of around 0.2 percent of euro zone GDP,” it added.[/quote]According to Reuters, Herman Van Rompuy, the president of the European Council, first brought up the separate budget proposal in September – in a paper discussing how to strengthen Europe’s monetary union.
In the paper, Rompuy said that a “fully fledged fiscal union” among the 17 countries that shared the euro could involve the creation of a single treasury office and “a central budget whose role and functions would need to be defined”.
On Sunday, U.K. Prime Minister David Cameron also expressed support for the plan, suggesting that countries in the eurozone region should be the ones paying more toward governance of the bloc.
[quote]“When you have got a single currency with a single bank behind it and more transfers between those countries there will come a time when you are going to need to have two European budgets: one for the single currency because they are going to have to support each other much more and perhaps a wider budget for everyone else,” Cameron said, as cited by Bloomberg.[/quote]Related: The Eurozone Exposed – How Europe Can Avoid A Prolonged Depression: Stefano Micossi
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The British leader also promised to use his veto powers to get a “good deal” in negotiations over the 2014-2020 EU budget; and said that he would renegotiate Britain’s relationship with the economic bloc after the 2015 general election.
“It’s very simple what I want: Europe is changing; the single currency is integrating rapidly,” he said. “I think this presents a great opportunity for Britain to get the sort of deal we’ve always wanted in Europe. That’s at the heart of a free-trading, open-market Europe, but we don’t want this endless political integration.”
