The European Commission on Thursday proposed two new funds to encourage EU member states to streamline their economies and to protect euro zone members from economic shocks.
The protection of euro zone members was seen as a response to French demands for a euro zone budget.
The euro zone has largely recovered from the economic crisis that struck in 2009, but EU officials have long been warning that now is the time to reform the bloc’s economies and bolster the currency zone against future shocks.
“Our proposals will reinforce the resilience of individual economies and the euro area as a whole,’’ commission Vice President Valdis Dombrovskis said.
The new eurozone fund would provide up to 30 billion Euros (35.1 billion dollars) in loans guaranteed by the EU budget to respond to “large asymmetric shocks” external factors that affect some states over others.
Some of the funding would come from member states, which would be asked to hand over a share of the profits made from issuing currency, known as seigniorage.
The proposal follows calls by French President Emmanuel Macron for the creation of a eurozone budget, although it is far smaller in scope than what he has envisioned.
The second fund would set aside 25 billion Euros for EU members that enact the commission’s economic reform programme, with 2.16 billion Euros earmarked for countries seeking to join the euro.
The measures form part of the commission’s next long-term budget plan for 2021 to 2027.
It must be agreed with EU governments and lawmakers who are already at odds about the proposal.(dpa/NAN)
