European Union leaders will press for new efforts to boost economic growth and improve lending conditions when they meet later this month, according to a draft document prepared for a June 28-29 summit in Brussels.
The 27-nation bloc will pursue growth measures at a time when, in the words of European Central Bank President Mario Draghi, “there is no inflation risk in any European country” and the ECB will continue to provide liquidity to the banking system. Draghi is working with EU President Herman Van Rompuy, Luxembourg’s Jean-Claude Juncker and European Commission President Jose Barroso on a blueprint for further integration of the 17-nation euro region.
“In the financial circles, few doubt that it makes economic sense to create a deep, liquid and stable market for government bonds with the joint issuance of public debt,” Rehn said. “But this process has to provide an answer to the concerns about moral hazard, or a possible free-riding on the budgetary prudence and economic strength of others.”