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New Eurogroup chief promises reform plan by June

2 min

Frankfurt am Main (AFP)

The Eurogroup must negotiate quickly on eurozone reform to be ready for action to shore up the single currency area by June, the new head of the finance ministers' grouping said Wednesday.

"We have to have clarity on the reform agenda by the time of the EU summit in March, so that we can deliver at the summit in June," Portuguese finance chief Mario Centeno told German business daily Handelsblatt.

As the 19-nation currency area finally emerges from years of crisis, there is agreement in many eurozone capitals that it must be buttressed to better weather future economic storms -- but not all countries agree on how best to do it.

Nevertheless, "we have an uncommonly favourable opportunity for reforms. Important EU countries have had elections and are entering new parliaments with fresh strength. The economy is growing in all countries and budget deficits are falling," Centeno said.

"And despite all the controversies, support for European integration among citizens is high. We have to use this one-off chance," he added.

The biggest arguments about how best to improve the eurozone see wealthier nations at odds with economically weaker ones.

Countries like Germany, the Netherlands or Finland fear their state coffers being raided to fill budget gaps for neighbours like Italy or Greece.

"Fears that there could end up being permanent transfers (from richer to poorer countries) are very understandable," Centeno allowed.

But "completing the institutional architecture of the eurozone brings advantages for all member countries. Everyone has to understand that," he insisted.

The centre-left politician is confident he can help broker a deal that would create a common budget for the eurozone, a European Monetary Fund to lend to countries in crisis and a eurozone-wide bank deposit insurance scheme.

Some of the changes could be introduced gradually as countries build up confidence by fulfilling strict conditions, Centeno said.

"The status quo is not an option. We must reach compromises, even when points of view are very different," he told Handelsblatt.

Eurozone countries "will take their next steps in integration in a much more harmonious way, I'm confident of that," he added.

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