European Union faces the biggest challenge

EU’s Barroso: European Union faces the biggest challenge it has seen in its history

• As well as social and economic crisis, we face crisis of confidence
• If we do not move forward with more integration we will face fragmentation
• Greece is and will remain a member of the euro area
• European Commission is considering a wider guarantee mechanism to help Greek banks lend again (interesting)
• Trust that ECB will do whatever is necessary to ensure the stability of euro area
• Once July 21 agreement ratified, EFSF will be able to support recapitalisation of banks
• We need to do everything possible to speed up the entry into force of the permanent ESM mechanism
• Deeper integration of euro zone will allow for issuance of joint sovereign debt
• Once euro area ready, issuance of joint debt will be seen as a natural next step
• Some euro area bonds could be introduced under current treaty, fully fledged joint bonds will need treaty change
• Further changes to the EU treaty may be needed to get around issue of unanimous decision making
• Commission will deliver proposals on tighter regulation of credit rating agencies by end of year
• Financial transactions tax could raise 55 bln a year, financial sector must make its contribution

By
M.Zohaib Gadit
Forex Trading Consultant