Business World

Tuesday 23 July 2019

Van Rompuy is ready to run the 'United States of Europe'

Germany strengthens demands for a new treaty giving the president extra powers

Siobhan Creaton

EUROPEAN Council president Herman van Rompuy said yesterday that he was ready to run for a second term as European Union president, to lead a "United States of Europe".

His comments came as Germany strengthened demands for a new treaty giving the president extra powers.

Mr Van Rompuy has announced he is willing to take on the "unfinished" eurozone debt crisis with new powers setting an "economic government" in Brussels. "Because the work is not finished, I do not rule out a second mandate," he said yesterday. "I would not do it for personal glory."

The former Belgian prime minister took up his post as president of the European Council, the regular summits of EU leaders, on a two and a half year term that expires in May 2012.

He is jockeying to continue in his post, as calls are growing for a European treaty which would give the EU president new powers.

Many EU officials and diplomats regard Mr Van Rompuy's announcement as an attempt to put himself at the front of the campaign for a federal United States of Europe with himself as president.

"It is no coincidence that he steps forward at the very moment that federalism is on the agenda again," said an EU official.

Under German proposals, Mr Van Rompuy, an economist, would also become eurozone president in control of a powerful secretariat for economic and financial affairs.

Germany is pushing for a plan to create a eurozone economic government, measures that would almost certainly require a new EU treaty despite the risk of a backlash from European voters angry at euro bail-outs and Brussels austerity programmes.

The move came as a bleak day unfolded despite upbeat comments from European Commission President Jose Manuel Barroso who said he did not expect Europe to slide into recession and his insistence that both the EU and the euro were "strong and resilient".

Mr Barroso's forecast that Europe's economy will begin to show modest growth offered little reassurance to the markets and left investors bracing themselves for more turbulence as the debt crisis looks far from resolved.

Meanwhile, ECB chief Jean-Claude Trichet yesterday urged eurozone states to immediately approve the strengthening of the EU bailout fund to deal with the debt crisis as it appeared some states were dragging their heels.

He also called for stronger governance across the eurozone, including the possibility of a central veto on decision-making by countries that fail to stick to the budgetary rules.

The IMF head, Christine Lagarde, also repeated her warning that banks in Europe will need extra capital to withstand any contagion from the continuing crisis, while a regional election loss for German Chancellor Angela Merkel's ruling party also added to the market woes.

Mr Barroso said eurozone policymakers and officials were doing "everything possible" to ease economic concerns.

Deutsche Bank chief executive Josef Ackermann said the continuing turbulence is reminiscent of the 2008 financial crisis. "The 'new normal' is characterised by volatility and uncertainty," he said. "All this reminds one of the fall of 2008, even though the European banking sector is significantly better capitalised and less dependent on short-term liquidity." (Additional reporting Reuters and Bloomberg)

Irish Independent

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