France, Italy call for full-time Eurogroup chief

Reuters News
Posted: Nov 20, 2013 12:49 PM
France, Italy call for full-time Eurogroup chief

ROME (Reuters) - France and Italy called on Wednesday for euro zone finance ministers to have a full-time chairman after European Parliament elections in May.

Speaking after meeting with Italian Prime Minister Enrico Letta in Rome, French President Francois Hollande said the euro zone needed to complete its banking union and set up a joint borrowing mechanism to finance investment.

"A third objective is to have euro zone governance, which means a chairman of the Eurogroup who can be named for a fixed period and work full-time," Hollande told a news conference.

The proposal follows a similar agreement between France and Germany in May on creating a full-time president of the 17-nation currency area's ministers.

According to a document released to journalists at the meeting, Hollande and Letta also urged an EU summit in December to agree on a resolution mechanism for failing banks.

It also called for the possibility of direct recapitalization of banks by the so-called European Stability Mechanism, the permanent crisis resolution mechanism for the countries of the euro area.

Germany, loath to share liability for rescuing other countries' banks, has been resisting this move, which it says would require a change in its national legislation.

"It is absolutely necessary the December European Council allows the launch of the banking union," Letta told journalists.

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Earlier, protesters threw smoke bombs and clashed with police in central Rome while Letta met Hollande in the capital.

The scuffles broke out around the Campo de' Fiori central square where people had gathered to protest against a high-speed rail link being built between France and northern Italy.

(Reporting by Julien Ponthus and Gavin Jones; writing by Leigh Thomas; editing by Mark John, Paul Taylor and David Evans)