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EUROPE: The Eurozone's state of the union

September 28, 2011 |  3:57 am

European Commission President Jose Manuel Barroso
This post has been updated. See the note below for details.

REPORTING FROM LONDON -– It's tough to give a state of the union address when the union itself is in a sorry state.

But that was the task before Jose Manuel Barroso, the head of the European Commission, the European Union's executive branch, on Wednesday morning, in the middle of a debt crisis that has only served to expose division and disharmony within the region.

In his speech, Barroso called on the EU's 27 nations to pull together and said that the solution to the debt debacle was more thoroughgoing integration, not less. He urged Eurozone countries to follow the logic of sharing a single currency to its natural conclusion: a full-on economic union, with common institutions, such as a Eurozone finance minister.

"Today, we are facing the biggest challenges that this union has ever had to face throughout its history -– a financial crisis, an economic and social crisis, but also a crisis of confidence," Barroso told members of the European Parliament in Strasbourg, France.

"We need to complete the monetary union with a real economic union," he added.

But the call for "more Europe" won't be well-received by plenty of Europeans themselves, who are finding cohabitation increasingly irritating. Hostility among the frugal countries of northern Europe, such as Germany and Austria, toward their free-spending neighbors in the south, such as Italy and Greece, is growing.

Solidarity is being put to the test this week in a series of votes in national parliaments on a plan to beef up the powers of Europe's bailout fund. Opponents of the proposal, whose passage is seen as crucial to getting a grip on the debt crisis, say they are fed up with rescuing countries that recklessly spent their way into trouble.

[Updated, 3:59 a.m., Sept. 28: The parliament in Finland, which has been skeptical toward the bailouts, approved the plan by a vote of 103-66, according to the Associated Press.]

On Thursday, it's Germany's turn. That country is expected to also ratify the plan, though the vote could be close.

For his part, Barroso insisted that Greece, the epicenter of the debt crisis, was in the EU to stay, despite grumblings from some that it ought to be thrown out of the club.

"Greece is and will remain a member of the euro area," he said. But he cautioned Athens, which has lagged in its enforcement of harsh austerity measures, to "implement its commitments in full and on time."

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-- Henry Chu 

Photo: The president of the European Commission, Jose Manuel Barroso, delivers his state of the union report to the European Parliament. Credit: Christophe Karabe / EPA 

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