French President Francois Hollande sent to Brussels his plan for stabilizing the euro and spurring European growth with measures including a more centralized supervision of lenders by the European Central Bank.
Hollande sent the European Union presidency his proposals to be incorporated in a broader plan for building a more integrated euro area that will be discussed at a summit on June 28-29, an aide to the president said, declining to be identified because of internal rules. The region’s leaders have asked EU President Herman Van Rompuy to sketch out “building blocks” for the summit that will come after a Greek election on June 17 that may trigger that country’s exit from the currency.
The French proposals don’t include contingency measures should Greece exit the euro area, Hollande’s aide told Bloomberg News. They include guidelines for growth, financial stability and a more integrated monetary union, the official said. It is a political plan that takes into account the concerns of the market, the aide added.
Proposals from Hollande and other EU leaders reflect efforts to underpin a banking system pockmarked by bad debt, notably on Europe’s crisis-hit periphery.
Hollande’s proposals call for the ECB to be placed in charge of a regional banking union, supervising financial institutions and guaranteeing deposits with funds raised through a tax on lenders, Le Monde reported, citing unnamed officials in the president’s office.
He called for the European Stability Mechanism, or ESM, to be able to recapitalize troubled banks, the daily said.
France’s plan will be sent to EU members today, Le Monde said. The proposals also include a 10-year plan for the creation of euro bonds, the use of bonds to finance infrastructure projects, a financial transaction tax and the recapitalization of the European Investment Bank, the afternoon daily reported,
The 2012 institutional rethink comes after the setup of two rescue funds, a “Euro Plus Pact” to promote competitiveness, a “European semester” to coordinate economic policies, unprecedented ECB bond purchases, two overhauls of fiscal rules and the drawing of a German-inspired deficit-limitation treaty.