Rajoy backs an EU central fiscal authority

• Tweet

SITGES, Spain, June 2 (UPI) -- Spanish Prime Minister Mariano Rajoy called for a central European authority over individual government finances.

"The European Union needs to reinforce its architecture. This entails moving towards more integration, transferring more sovereignty, especially in the fiscal field," he said at a speaking engagement in Catalonia, The Daily Telegraph reported Saturday.

He called for "centralized control" over government finances.

"And this means a compromise to create a new European fiscal authority which would guide the fiscal policy in the eurozone, harmonize the fiscal policy of member states and enable a centralized control of [public] finances," he said.

Given the precarious position of Spain's banks, which are said to require billions of fresh dollars to remain in business, and the size of the Spanish economy -- fourth largest in Europe -- Rajoy's pronouncement could have a catalytic effect on the argument that a central authority would give eurozone countries more collective clout in their effort to save the euro.

Further integration of either the 17-member eurozone or the 27-member European Union would send investors the signal that the euro is here to stay, the Telegraph said.

German Chancellor Angela Merkel has already said further discussions over a more centralized authority over government finances would be worthwhile.

Rajoy has said he would support an region-wide banking union. Plans for recapitalization of Spain's struggling banks are expected by the end of June, he said.