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Barroso: Cut bank/sovereign debt link

Friday, October 19 10:42:06

European Commission President Barroso in his speech following last night's leaders' Summit has again stressed that he wants to see the link between bank and sovereign debt broken.

He stressed on the need for deeper integration of Europe, particularly the euro area, and called for stronger and more binding framework for the implementation of key economic policies.

"Let's not forget why we are acting. We are advancing in our response to the crisis. Now we need to definitively break the negative link between bank debt and sovereign debt. This is urgent! Speed matters and that is why the Commission put its proposals on the table within weeks of the June European Council. Delivering on this will give a very important signal to our citizens, our international partners and to investors in general," he said.

"Today we have discussed the main open issues on the adoption of the Single Supervisory Mechanism."

"The European Council has confirmed the key principles. We will now work to finalise agreement on the legislative framework before the end of the year. The European Central Bank will have a fundamental role so a clear separation of supervisory and monetary functions is essential. The new supervisor will be able to intervene, if needed, with any bank in the euro area; it will be as inclusive as legally possible for non-euro area member states who want to join and the integrity of the Single Market will be respected," President Barroso added.

"The Commission is a strong advocate of deeper integration, in particular for the Euro area. This is urgent," he said at a press conference following the first session of the European Council meeting.

The Commission will set out its thinking on Thursday's European Council decisions in a few weeks' time in a blueprint for economic and monetary union, Barroso said.

He said Europe needs a stronger and more binding framework for the implementation of key economic policies, in particular in the euro area.

Barroso noted that at this meeting, much of the ground work has been completed for the key decisions to be taken in the next weeks.