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Call for more European federalism

The economic crisis has turned into a "fight for European integration", the president of the European Commission has warned.

Jose Manuel Barroso insisted that the answer to the growing threat to the euro was a more, and not less, integrated European Union.

Amid growing speculation that Greece may default on its debts or even leave the eurozone, Mr Barroso told the European Parliament: ""We are confronted with the most serious challenge of a generation.

"This is a fight for the jobs and prosperity of families in all our member states. This is a fight for the economic and political future of Europe. This is a fight for what Europe represents in the world. This is a fight for European integration itself."

In a three-way conference call later on Wednesday, German chancellor Angela Merkel and French president Nicolas Sarkozy will press Athens to honour its national austerity pledges in return for more bail-out cash from Europe.

The alternative, the Greek government is being warned, is national bankruptcy and a rupture in the single currency.

Mr Barroso used his speech in Strasbourg to fend off eurosceptic insistence that the crisis signals the end to integrationist dreams. He insisted that the "signals" he was getting were for "a more integrated Europe", adding: "What we need now is a new, unifying impulse, a new federalist moment - let's not be afraid to use the word."

The Commission president went on: "The right way to stop the negative cycle and strengthen the euro is to deepen integration, mainly in the euro area. This is the way to go."

He said the big problem was that new rules governing the running of the euro area had been agreed but not fully implemented by the euro-zone countries.

He said: "In the cacophony of criticisms, counter-criticisms, magic bullets and miracle panaceas that are proposed on a daily basis, the truth has been drowned out - that solid, feasible and concrete proposals have been made. That they have been agreed upon. But they have taken too long and have not yet been fully delivered."

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