Movement towards European economic union must continue - Van Rompuy in Estonia

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Photo: Andres Haabu

Movement towards a genuine European economic and monetary union has to continue, President of the European Council Herman Van Rompuy said in Tallinn on Tuesday.

"We must continue to move gradually yet relentlessly towards a genuine economic and monetary union," Van Rompuy said at a joint press conference with Estonian Prime Minister Andrus Ansip. For this to happen, the European Council has set out a number of priorities, he added.

According to Van Rompuy, it is most important to make rapid progress towards a banking union that will help restore normal lending conditions to European economies. "This is indispensable to strengthen economic growth and employment on a lasting basis," he said. "Our integrated financial framework or just our banking union will include a single supervisory mechanism supported by a single rule book."

The banking union will be completed by the establishment of a single resolution mechanism for which the European Commission will submit a proposal this year. "It is necessary to protect taxpayers in the context of a banking crisis," Van Rompuy stated.

"I believe that 2012 marked a turning point in the crisis in the eurozone. The eurozone is no longer in existential threat mode," Van Rompuy said. "But we should not become complacent, neither in member states nor at the level of the European Union and the eurozone. There is no way back.

"We also have to be fully aware that the economy is reacting with a time lag. Once financial stability starts coming back it takes time before this is translated into more confidence, investments, and growth," Van Rompuy said adding that it also takes time before the positive impact on employment starts kicking in.

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