Barroso alarm: "It is urgent to recapitalize the banks, use the Efsf"

The president of the European Commission illustrated his proposals to stabilize the markets to the European Parliament – For the Portuguese, acceleration should be made on the EU state-saving fund, the activation of which should be brought forward from 2013 to next year – A reform of economic governance is also requested continental.

There is no more time. To respond to the Greek crisis, Europe must be able to count on the greatest firepower imaginable. This is the position of Jose Manuel Barroso, president of the European Commission, who today presented a road map proposal to stabilize the finances of the Old Continent to the European Parliament.

ACTIVATE THE EFSF FUND ALREADY IN 2012 AND USE IT TO RECAPITALISE BANKS

According to Barroso, the Eurozone "must urgently recapitalize its banks to stop the contagion of the debt crisis, which by now has a systemic dimension". For this reason, the Spaniard believes that the EFSF state-saving fund should be able to finance credit institutions (if not all, at least those that are not supported directly by national governments).

Furthermore, the fund of discord should come into operation already in 2012 and not, as planned, in mid-2013. But it is not always Christmas: "During the recapitalization phase - specified the president of the Commission - the recapitalized banks the national authorities of supervision should prohibit the payment of dividends or bonuses”.

HIGHER CAPITAL RATIO, BANKS REQUIREMENTS TO BE CALCULATED ON PUBLIC DEBT

As for the supervisory institutions, in strengthening the banking system they should provide for "a significantly higher and higher quality capital ratio". Judgments on banks' capital adequacy should then “be formulated by looking at the exposure of credit institutions to sovereign debt”.

REFORM EUROPEAN ECONOMIC GOVERNANCE

Barroso thus comes to speak of Community economic governance, formed by the Council and the European Commission, which will have to be increasingly "robust and integrated". The two institutions should be guaranteed broader powers, especially as regards the monitoring and intervention on the public finances of the individual countries.

AID TO GREECE

Barroso also underlined the need to liquidate the new tranche of loans to Greece. The European Union should then agree on a second aid package for the Greek country, providing for contributions from both the public and private sectors.