Spain demands deeper euro zone integration


SPAIN’S CONSERVATIVE government has demanded deeper integration in the euro zone, suggesting in a paper to Brussels that members of the bloc should pool debt management and share a budget to fight crisis financial shocks.

German Chancellor Angela Merkel and France’s new President Emmanuel Macron agreed on Monday to an initiative for deeper European Union integration and opened the door to changing the bloc’s treaties after meeting in Berlin.

Spain is not alone – France is also pushing for greater cooperation among the 19 countries that use the euro currency.

The demand comes after the EU was rocked by Britain’s decision to leave, prompting countries to take positions on how best to shore up unity in the bloc.

Spain’s proposals, which also include a common euro zone unemployment insurance scheme, were submitted to the European Commission in February but came to light this week and were released by the economy ministry on Tuesday.

Spanish conservative Prime Minister Mariano Rajoy has long called for further integration and a euro zone banking union, including creating a deposit insurance scheme.

Spanish government’s proposals go even further than those Germany and France have proposed, including suggesting common debt management is a vital part of any fiscal union.

‘Participating member states should allow for a certain degree of debt mutualisation,’ the paper said. It later added: ‘The introduction of a euro area Treasury… and the possibility for common debt issuance could also be envisaged.’

The joint Eurobond idea has been shunned by Germany amid concerns it would have to bankroll others and Macron has said he did not favour mutualising debt.

Rajoy had already pushed for jointly issued Eurobonds in 2012, at a time when his government was trying to steer Spain through one of its deepest ever recessions and had to request a European bailout for the country’s weakest banks.

Spain, the euro zone’s fourth-largest economy, has since recovered to become one of the fastest-growing in the bloc.

Madrid’s latest proposals also included a common ‘rainy day fund’ for the euro zone that could used to counter financial shocks and support investment.

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