(Updates with quotes from Miklos beginning in second paragraph.)
Dec. 6 (Bloomberg) -- Slovakia supports a French-German proposal for closer fiscal union in the euro area and won’t insist at a European Union summit that private creditors share sovereign-debt losses, Finance Minister Ivan Miklos said.
The so-called private-sector involvement in potential losses is not necessarily needed as part of an agreement on new euro-area rules to be discussed by EU leaders later this week, Miklos told reporters today in Bratislava, Slovakia.
The key element is to agree on “clear, strict, automatic and enforceable” fiscal rules that will prevent profligacy, he said. “If fiscal union means such enforceable rules, than such a fiscal union shouldn’t be a problem for us.”
EU leaders meet on Dec. 9 to discuss tightening the euro- area’s economic co-operation, including sanctions for deficit violators as the two-year-old debt crisis continues to engulf the region. Standard & Poor’s warned yesterday it may downgrade national credit ratings across the bloc.
Miklos said it’s crucial that the new fiscal rules allow a review of member states’ budgets before they are submitted to national parliaments for approval. He “believes” that the summit will lead to an agreement which will calm markets and at the same time won’t include issuing joint bonds nor unlimited purchases of distressed countries’ debt by the European Central Bank.
--Editors: Alan Crosby, Douglas Lytle
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