Europe does not need new institutions: EU president

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European Union president Herman Van Rompuy said Thursday the time was not ripe for new European institutions, seemingly slapping down a French proposal for a reinforced eurozone "government".

Paris has suggested a radical reform of how the 16-nation eurozone should be run, suggesting regular meetings of leaders and a secretariat -- with its own president -- to coordinate economic policy within the currency bloc.

But asked about this following talks with German Chancellor Angela Merkel, the president said: "I think the main question today is not about new institutions or technical support for existing institutions.

"The main discussion is on the content, on the substance."

Van Rompuy is chairing a task force drawing up new rules for economic governance. He will summit his initial report to EU leaders at a summit in Brussels next week and a final recommendation in October.

He said he had discussed the "initial conclusions" with Merkel, including a strengthening of the EU's budgetary rules and closer surveillance of gaps in competitiveness between member states.

Potential changes to the EU treaties to incorporate tougher rules should not be "taboo," he said.

Merkel said a change to the treaties laying down how the bloc dealt with recalcitrant nations "might give some assurance to the markets."

Plans for reforming the way the euro area is run have threatened to split the EU.

Germany has also been cool on the French plan, fearing that it could call into question the independence of the European Central Bank.

Berlin, supported by Warsaw, is also pushing for coordination to be strengthened at the level of the wider bloc of 27 countries in the European Union.

The French plan has also run up against some scepticism in Brussels, with the head of the European Commission, Jose Manuel Barroso, saying that economic governance should be within the 27-member EU.

The commission is determined to "avoid a division of Europe," Barroso said, adding that new institutions would "only introduce new confusion."

© 2010 AFP

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