The European Commission proposed on Wednesday new, intrusive laws to make sure budgets of euro zone countries do not break EU rules and that their borrowing falls, which could lead to joint debt issuance in the future.
Following are comments from the Commission on its plans:
EUROPEAN COMMISSION PRESIDENT JOSE MANUEL BARROSO
ON ROLE OF EUROPEAN CENTRAL BANK:
Reality is of course the teacher, but in the European Union we are a community based on the rule of law. We cannot go against the rules of law and our own principles. And the ECB has to act in a framework of the treaty.
As you know, we fully respect the independence of the ECB. We believe it is critically important for the credibility not only of the ECB, but also of the euro and the euro area, and we are confident the ECB will take all the necessary measures to guarantee, of course, not only price stability but also financial stability. As they have been doing.
ON JOINTLY ISSUED EURO BONDS:
We are launching the debate. At this moment, the Commission has not yet decided on the preferred approach. We believe it is better to put those different options, in what I believe is a very objective way, based on sound analysis, to (a) public consultation, including of course all our member states, but also the citizens of Europe, the experts (and) the different elements of our civil society.
ON INTENTION OF JOINTLY ISSUED BONDS:
Let me repeat what I have said a number of times -- stability bonds will not solve our immediate problems and cannot replace the reforms that are needed in countries currently under pressure.
But it is also important to show to public opinion and to international investors that we are serious about stronger governance in the euro area, both in discipline and in convergence, and stability bonds are exactly an example of that.
An example of reinforced governance, of a strong will to live together in the euro area, and a good example of discipline and convergence.
ASKED IF THE EURO BOND PAPER GOES AGAINST THE WISHES OF GERMANY:
I think that to consider this against any government or any member state, that of course is completely inappropriate.
And it would be absolutely completely inappropriate to consider a debate, a serious debate, on very important issues as something against a specific member state... and the most important economy.
So certainly our intention is not to go against anybody and certainly not against the member state that is the biggest economy in the euro area and in the European Union.
ON OPPOSITION TO JOINT BONDS IN GERMANY:
I absolutely don't agree, that there is absolute opposition of any country. On the contrary, in my contacts I get the exactly the opposite impression, that the idea of having stability bonds is making its way.
If you look at those comments made by people from Germany, they are in fact most of all about the timing of the options we are now putting (forward).
ON BUDGET PROPOSALS:
Under the new rules, the Commission will have greater surveillance powers, so that we do not face again the situation where failing in one country endangers the stability of the euro area as a whole.
National budgets will of course be prepared by governments and voted on by national parliaments. Parliaments will of course have the final say.
The difference with the current system is that the Commission will have the right to issue an opinion and may request changes. National parliaments will for the first time have the full information on all other countries in the euro area.
EU ECONOMIC AND MONETARY AFFAIRS COMMISSIONER OLLI REHN ON GENERAL PROPOSALS ON FINANCIAL ASSISTANCE:
It suggests that the Commission will have the right to propose to the council to recommend that a member state to request financial assistance. The proposal would be based on the commission's analysis in line with... the European Central Bank.
ON SITUATION IN SPAIN:
As regards the policies for fiscal consolidation and structural reform of Spain... they are on track. Spain has taken very significant decisions in the field of fiscal consolidation, especially in the past year.
...There is a very clear need to reinforce work in the field of structural reforms, not least in the labor market.