Few details are available as of yet. But it is already debated in the European newspapers.
The initiators are:
President of the EU-Commission José Manuel Barroso
President of the EU-Council Herman Van Rompuy
President of the Euro-Group Jean -Claude Juncker
CEO of ECB Mario Draghi
The principle seems to be:
A country can only freely use means they have themselves earned or taxed.
If a country wants to run a deficit they must have the consent of the Finance Ministers of the Euro-group. This committee then issues Euro Bonds to cover this spending.
This committee is headed by a chairperson – how this chairperson should be elected is not clear; but the idea is that eventually he could rise to be a European Finance Minister. This committee should be controlled by “a senate – type” council of MP’s from the national parliaments.
The authority should only apply to new debt from new deficits.
This will clearly cut deeply into the national sovereignty of the Euro-Group countries, but it appears to be the price Germany extracts for the bail out of Southern Europe and Ireland.
On the other hand it will mean access to financing common European investments f.i. infrastructure. Such investments would be crucial to indebted countries struggling to achieve growth, but hampered by the debt from previous frivolous spending.
At the same time it would prevent – or at least make it more difficult – countries from committing financial suicide like it has been done in a systematical fashion in the PIIGS-countries.