Hi °C | Lo °C Olli Rehn, the vice president of the European Commission, has warned that the eurozone is at a "decisive juncture" as he revealed his plans for 'Economic and Monetary Union 2.0'.
Despite the "imbalances" in the single currency posing "a formidable challenge", Mr Rehn also maintained that the European Central Bank "will remain an anchor of stability throughout the crisis".
Writing in the Wall Street Journal, the commissioner for economic and monetary affairs and the euro argued that the economic problems of today are rooted in the beginnings of the European project 13 years ago.
"The eurozone is at a decisive juncture - not only in its three-year-old debt crisis but in its 13-year-old history," he wrote. "And the two are inextricably linked: The short-term symptoms of this crisis have their roots in long-term ailments.
"Europe is undergoing a correction of the macroeconomic imbalances that built up before the financial shock of 2008.
"Over the past decade, Europe's integrated financial market channelled savings from countries with sluggish domestic demand to countries where demand was thriving, credit was booming, and wages and prices were increasing."
Revealing that a "specific and time-bound road-map" for a stronger euro will be in place by the end of the year, Mr Rehn reiterated the need for a joint pooling of debt for the 17 members and for the European Stability Mechanism (ESM), the eurozone's permanent firewall, to be able to recapitalise banks directly.
Both measures have so far been resisted by German Chancellor Angela Merkel, who fears that the financial weakness of countries such as Greece will harm stronger countries should they share debt.
