Draghi backs eurozone super-commissioner plan

Mario Draghi Mr Draghi said governments must give up more sovereignty if trust in the euro is to be restored

European Central Bank President Mario Draghi has backed German calls for a European super-commissioner to oversee national government budgets.

German Finance Minister Wolfgang Schaeuble wants the "currency commissioner" to be given the power to veto national budgets.

"I explicitly support this proposal," Mr Draghi told der Spiegel magazine.

Plans to impose strict limits on budget deficits have already been agreed by 25 of the 27 European Union members.

Only the UK and the Czech Republic have opted out of the new rules.

Another haircut

"If we want to re-establish trust in the eurozone, countries must pass a part of their sovereignty to the European level," said Mr Draghi.

The super-commissioner would enjoy the same power to make legally binding decisions against individual national governments that is currently only enjoyed by the EU competition commissioner.

The permanent loss of national sovereignty over government budgets to Brussels is being demanded by Germany at a time when eurozone taxpayers - and primarily German taxpayers - look likely to be called on to foot the bill for solving the eurozone crisis.

A new "banking union" currently being fleshed out will make the eurozone as a whole collectively responsible for any losses associated with future bank bailouts, irrespective of which country the troubled bank happens to be located in.

There is however still uncertainty as to whether this sharing of risks will also apply to the rescue of Spain's banks that is currently being prepared, or whether the Spanish government will instead be required to guarantee the bailout.

Meanwhile, expectations are growing that Greece will be given a further write-off or "haircut" of its debts, including possible relief on its debt repayments to the eurozone's bailout funds or the European Central Bank.

Mr Schaeuble ruled out any direct debt forgiveness on Sunday.

"You don't give a debtor who doesn't service your debt claims new money," he told Deutschlandfunkradio. "We would be prevented by law from doing any more."

He did however leave the door open to an arrangement under which new bailout loans could be used by Greece to buy back its private sector debts at what are currently cheap market prices.

Greece has also been asking for two more years to meet the spending cuts demanded by international creditors.

On Wednesday, the Greek Finance Minister Yannis Stournaras had claimed that a deadline extension had been agreed.

But both Mr Draghi and Mr Schaeuble have denied this was the case, pointing out that the negotiations over the release of Greece's next tranche of bailout money were not yet complete.

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