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Mario Draghi Calls For Economic Union

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European Central Bank Chief Mario Draghi had pushed members of the Euro bloc to have an economic union on rules regarding economic policies. He said that fears regarding the break-up of the bloc could continue until the EU provided continuous reforms to ensure that all countrys’ fiscal policies and reform efforts are in control.

However, many did not like the idea of wresting the decision-making process out of the hands of national governments.

Draghi said on Thursday that once the Eurozone had an “economic and fiscal union” the fears and doubts of investors would be swayed. He said that monetary unification was not enough because the strands of decision making interacts and strengthens two or three other nations.

Fiscal union required the EU to have new budget rules with stability and growth pact in mind. This is to ensure the national decisions do not affect the currency in other countries in the same area.

Draghi said “The importance of each country sticking to its commitments under the stability and growth pact should therefore be beyond debate,” he said. “Indeed, that a sound fiscal framework is necessary in a monetary union goes without saying. Whether it is sufficient to safeguard fiscal policy as a stabilisation tool, however, has been challenged by our experience during the crisis.”

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