The on-going crisis in the Eurozone has prompted calls for a ‘European Treasury’ to stabilize the Euro with more coordinated economic governance.
A proposed European Treasury would be a radical step to an ever closer Union by extending the European Union’s economic governance. Currently Euro members monetary policy, that is interest rates and inflation, is centrally coordinated by the European Central Bank. Setting up a European Treasury would extend these powers to member states fiscal policy – that is tax and public spending.
Advocates of a new European Treasury argue that it is a necessary legacy of the Eurozone crisis in order to effectively resolve any future crises in the Euro. Many opponents argue that it is one step too far to an ‘ever closer Union’ that would see member states surrender their sovereignty to a more powerful European Union.