EU leaders mull true fiscal union: report

(BERLIN) - EU leaders are working on a plan for a real fiscal union in which eurozone members could only borrow certain funds with joint approval, the German weekly Spiegel said in a report to appear Monday.

Under the mooted plan, eurozone countries would only be able to freely spend funds already matched by their respective revenues, the report said, without naming its sources.

A government that needed more money would have to present its case to the Eurogroup of eurozone finance ministers, which would decide if the request was justified and how much could be borrowed.

Joint eurobonds backed by all eurozone members would then be issued to finance the debt, the report said.

The plan would apply only to new debt, it added.

Details were being drawn up by European Commission head Jose Manuel Barroso, European Council president Herman Van Rompuy, Eurogroup head Jean-Claude Juncker and European Central Bank chief Mario Draghi, Spiegel said.

Under the proposal, the group of finance ministers would be headed by a chairman whose post is to evolve into that of European finance minister.

A new institution, staffed by representatives from eurozone national parliaments, would also be created to oversee the the finance minister's work.