Eurozone to Get Its Own Budget


Eurozone to Get Its Own Budget

The eurozone prepares a practical step toward becoming a superstate.

Eurozone nations could gain their own budget, separate from the European Union’s budget, under draft proposals published October 8 and supported by key member states. These proposals would put the eurozone on the path to developing a common taxation and spending policy and common treasure. It is a practical step toward becoming a superstate.

Reuters writes: “The fund could be used to help a country such as Spain, which has unemployment of 25 percent and is struggling to reinvigorate growth. In exchange for budget rigor, the pan-eurozone fund could provide targeted assistance.”

It would be a carrot to persuade nations to submit to the EU’s central control. It would also make the eurozone more like a single nation, where money is channeled to regions that are struggling. Eurozone nations would then be under further pressure to harmonize their taxation, spending and social problems, so some countries aren’t constantly leaching off the common fund.

“So this is a discussion which is just beginning,” wrote Chris Morris, a Europe correspondent at the bbc. “But it’s another sign of the kind of change which is coming in the EU.”

Reuters reports that Germany and France “strongly support” the proposal. British Prime Minister David Cameron publicly supported it, as he hopes it will mean Britain will have to give less money to the overall EU budget. His thinking is that if more spending is done by the eurozone, which Britain is not a part of, then the overall EU will spend less.

EU Observer reports, “Even for non-euro countries—which are usually wary of creating a ‘two speed’ Europe—the idea is becoming acceptable as long as it does not mean less money in the common pot.”

The proposal is in the draft conclusions to be discussed at a European Council meeting October 18 to 19.

Over the past few weeks, key European leaders have talked a lot about creating a federal Europe and pooling sovereignty. A common eurozone budget is a practical first step in that direction. Watch for a Europe superstate to steadily move from rhetoric to reality.