THE European Union single currency will only survive through even GREATER integrations, analysts have warned.
Eurozone nations will have to find ways of working more closely together despite growing anti-EU sentiment in some countries and the fallout from Brexit.
Analyst Antonio Barroso, managing director at Teneo Intelligence, told CNBC: “I think further integration is inevitable, especially if member states want to make the euro zone sustainable in the long term.
European leaders are not comfortable changing EU treaties on a regular basis but may have to take intermediate steps in the meantime.
Daniel Gros, director of the European think tank Center for European Policy Studies, said: “It is very realistic to expect further integration but change will take time. Nothing much will change immediately.”
Germany and Italy will be concerned with upcoming national elections and France’s president Emmanuel Macron will want to reform his country’s economy before any major changes are introduced to existing frameworks.
Mr Gros said: ”Macron has said that he needs to reform France first, before he can discuss deep euro area reforms with Germany.”
In June 2015, the European Commission published the so-called Five Presidents Report. That saw European Commission President Jean-Claude Juncker, along with European Council President Donald Tusk, Eurogroup President Jeroen Dijsselbloem, former European Parliament President Martin Schulz and European Central Bank President Mario Draghi, outline their ideas for how to further integrate the euro area.
They acknowledged the possibility of a debt mutualisation instrument – Eurobonds – and the creation of a eurozone finance minister.
Mr Gros said: ”I predict that we might have at some point somebody called initially finance minister, but with few powers over and above those of the European Commission today.”
The Commission – the EU’s executive body – oversees countries’ economic performances and has the ability to fine them if they do not comply with certain rules though such power has never been used.
Carsten Brzeski, chief economist at ING, told CNBC: “I think that a eurozone finance minister, some reshuffling of European funds to get closer to a euro zone unemployment insurance and further policy harmonisation are the most feasible next steps.
“The real huge steps towards financial burden sharing, tax harmonization and loss of national sovereignty are still highly unlikely to happen, even though they should.”
Full article: More EU integration Inevitable: Mercron will be forced to federal EU or eurozone will die (Express)