Belgian PM moots creation of European finance ministry

8th March 2010, Comments 0 comments

Belgian Prime Minister Yves Leterme has the creation of a European finance ministry along with a group to manage debt for the 16-nation eurozone.

FRANKFURT - "I propose to take the next step and create a common finance ministry and a European debt agency for the eurozone," Laterme wrote in a piece published by the Financial Times Deutschland (FTD).

Luxembourg Prime Minister Jean-Claude Junker, who currently chairs the eurogroup of eurozone finance ministers, voiced support meanwhile for a European ratings agency that would be a part of the European Central Bank.

"We are listening too much to ratings agencies" such as Fitch, Moody's and Standard and Poors', Juncker told the German radio Deutschlandfunk.

Those groups "contributed to the plunge of financial markets" after US investment bank Lehman Brothers collapsed in September 2008, Juncker added.

"It would be wise for that we set up ourselves a European agency" to rate sovereign, or country debt, he said, backing an idea that was mooted in German press reports this week.

The German finance ministry has said it is unaware of such a plan.

Laterme said the debt agency he had in mind could be called the EDA, or European Debt Agency, and be charged with issuing and managing eurozone government debt.

It would be controlled by the eurogroup, with the European Investment Bank acting in a secretariat role, he told the FTD.

"The EDA would take charge of existing credits and issue new ones with the approval of the council of EU economy and finance ministers (Ecofin) and the eurogroup," Laterme suggested.


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