EU, Spain appeal for urgent action to resolve euro crisis | business | Hindustan Times
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EU, Spain appeal for urgent action to resolve euro crisis

The European Commission pressed governments to wake up to the need for urgent action on the euro zone crisis on Wednesday, saying integration is the solution, and Spain said the ECB must help immediately.

business Updated: Jun 13, 2012 22:43 IST

The European Commission pressed governments to wake up to the need for urgent action on the euro zone crisis on Wednesday, saying integration is the solution, and Spain said the ECB must help immediately.

The warnings over the gravity of the crisis, with Spain and Italy under attack on financial markets four days before a critical election in Greece, came after a rescue for Spanish banks fell flat. However, they contrasted with reassuring words from Germany about reforms in Italy.

But the leader of Greek conservatives in the election on Sunday argued that the terms of the Spanish rescue meant that Greece could renegotiate its bailout conditions.

European Commission president Jose Manuel Barroso said the solution to the debt crisis lay in urgent progress towards ever greater integration, following a line taken by Germany, saying that the urgency of the crisis may not be “fully understood” by some governments. Barroso said: “Without confidence (on markets) in the irreversibility of economic and monetary union, our prospects are limited.”

Barroso said switching the focus to ever greater union and integration, as proposed by Germany, would be a lengthy process but said signals in this direction were urgently needed.

With popular anger rising in Spain and before the Greek election, and amid falling living standards for the worst off, Barroso said that the European Union was now in a “social emergency”.

Spain’s Prime Minister Mariano Rajoy appealed on different grounds for the same sense of urgency in a letter to top EU officials released on Wednesday: “Today, the only institution we have with the capacity to assure the required conditions of stability and liquidity is the European Central Bank,” he said.

In Rome, Italian Prime Minister Mario Monti said that he was “relaxed” about Italy’s outlook, a day ahead of a visit by new French President Francois Hollande who is focusing on action for growth, downplaying fears that Rome may be next in the front line.