European socialists want euro stability agency

(BRUSSELS) - Greek Prime Minister George Papandreou joined Saturday fellow European socialists in a call for a dedicated agency to stabilize euro debt and for limiting the power of credit rating agencies.

The Party of European Socialists (PES) issued a six-point eurozone recovery plan, declaring it time for governments of member states "to collectively reassert their primacy over financial markets."

Among the group's demands was a "stability agency" which it said would "reprofile the debt of eurozone member states and at the same time ensure correction of a member state whose economy runs the risk of losing stability."

"In this respect the eurozone could benefit from the issuing of Eurobonds," the PES said.

The group also called for a "truly efficient" eurozone mechanism with guarantees "designed to help countries attacked by speculators and which ensures private investors responsible for reckless lending bear their share of the costs of stabilizing measures."

The statement entitled "A Eurozone based on democratically accountable economic policy" followed a phone conference meeting attended by Papandreou and, among others, French opposition leader Martine Aubry and new Finnish Foreign Minister Erkki Tuomioja.

It came ahead of an extraordinary meeting of eurozone nations on Thursday in Brussels on ways to tackle the debt crisis and provide fresh aid for Greece.

The EU and International Monetary Fund bailed out Athens last year with a package worth 110 billion euros ($160 billion) but the country remains in serious financial difficulty, with credit rating agencies having demoted Greece's bonds to junk status.>

Also on the PES list of measures was a European tax on speculation, "to raise new revenue without harming ordinary citizens and avoid unfair social cuts," and financial reforms "to ban harmful practices and instruments and limit the power of credit rating agencies by ensuring genuine supervision and underlining their responsibility."

Lastly they called for a European investment strategy to promote fair growth and job creation and "urgent" measures to ensure a sustainable solution for Greece.

The group said in the statement: "Today, as European Conservatives are failing to take hold of the urgency of the situation, we are convened to demonstrate that another Europe is possible: a Europe that acts decisively and collectively."

Papandreou welcomed the PES initiative in a statement on the group's website, saying: "The European Union has great economic potential but under conservative leadership there is a lack of political will to turn it into policies."

Martin Schulz, leader of the socialists in the European Parliament, and new Irish Foreign Minister and Deputy Prime Minister Eamon Gilmore also took part in the phone meeting, the group said.