Reuters: US Dollar Report: UPDATE 1-Euro zone needs deeper integration to survive -EU's Rehn

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UPDATE 1-Euro zone needs deeper integration to survive -EU's Rehn May 31st 2012, 08:45 Thu May 31, 2012 4:45am EDT * Commissioner urges more solidarity, coordination to save euro * Rehn warns against launching "false debate" over euro bonds BRUSSELS May 31 (Reuters) - Europe's single currency must be supported by responsible fiscal policies and closer cooperation between countries in the euro zone to survive and prosper, the EU's top economic official said on Thursday. "We need a genuine stability culture and a much upgraded common capacity to contain common contagion," EU Economic and Monetary Affairs Commissioner Olli Rehn told a conference. "This is the case, at least if we want to avoid a disintegration of the euro zone and instead make the euro succeed," he said. But Rehn cautioned that going straight to a discussion of issuing bonds jointly underwritten by all euro zone member states, known as euro bonds, would be a "false debate". He urged countries first to bring budgetary policies more into line and move towards fiscal union. "We will not be able to overcome our problems by focusing on a joint issuance of public debt without simultaneous fiscal sustainability, nor will we be able to anchor a stability culture in the euro zone without significantly pooling the burden of adjustment," Rehn said, in a call for European solidarity. "Pulling these goals by force (together) is indeed a false debate," he said. French President Francois Hollande has spoken in favour of joint euro bonds, but Germany is opposed to them, saying they could only be considered at the end of a process of deeper fiscal and economic integration. Link this Share this Digg this Email Reprints

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