THE EUROPEAN COMMISSION could be given powers to impose austerity measures that usurp governments of bailed out nations such as Ireland under proposals being put forward by the European Council president, it has emerged.

The Guardian reports that the proposals are being put forward in a document by president Herman Van Rompuy who will chair the crucial EU summit in Brussels this Thursday and Friday as leaders look to thrash out a deal that will convince markets of the single currency’s future.

The paper reports that under the proposals in the document bailed-out countries could be stripped of voting rights in the EU if there is non-compliance with EU directives although this proposal appears to have been dropped.

The document also proposes “more intrusive” control of national budgetary policies by the EU which could enforce fiscal discipline on a supra-national level. The draft document also discuses the potential for the harmonisation of pension reforms, social security systems, labour market policy, and financial regulation across the eurozone.

It also argues in favour of eurobonds, or the pooling of eurozone debt, which is seen as one way of solving the crisis. However, this is something that the German government is against.

Earlier, German finance minister Wolfgang Schauble argued that the threat of a downgrade of the eurozone’s credit rating by Standard & Poor’s was the “best possible incentive” for European leaders to agree measures later this week.

For more information, see Guardian.co.uk >

Germany welcomes S&P moves to downgrade eurozone >

Merkozy: Europe needs a ‘tougher’ treaty >

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