France and Germany plan 'European Treasury' amid Greek financial crisis

New permanent EU president Herman Van Rompuy would be in charge of the new task force.

The contentious language is contained in a document prepared for an emergency meeting of the 16 "eurozone" EU leaders last night at a summit in Brussels.

The meeting was staged to decide on a "mechanism" for bailing out the crisis-hit Greek economy if necessary, including a "substantial" contribution from the International Monetary Fund.

But the discussion paper put together by Berlin and Paris to restore the euro's credibility also states that the EU should assume economic control in the longer term.

The draft states: "We commit to promote a strong co-ordination of economic polices in Europe. We consider that the European Council should become the economic government of the EU, and we propose to increase its role in economic surveillance and the definition of the European Union growth strategy."

The European Council is the formal name for summits of EU leaders which, under the Lisbon Treaty, are now chaired and organised by Mr Van Rompuy, a former prime minister of Belgium.

The one-page text was due to be discussed by the 16 eurozone leaders, but last night British officials were taking a keen interest in the language proposing "economic government".

EU sources later said the wording of the declaration was likely to be changed to "economic governance" – terminology acceptable to the UK and also preferred by some other governments voicing concern at the summit about the possible implications of the original language.

An EU spokesman acknowledged that the British might be concerned, but said that the EU could not tackle issues unless they were covered by EU treaty, even if such a text were approved.

"It's not as if this could trigger the EU setting taxes or anything," the spokesman said.

The document says Mr Van Rompuy will head a "task force" from the member states and the European Central Bank, looking at "all options" to achieve the legal framework for economic government – which could mean EU treaty changes.

If the idea gained momentum, Croatia's likely EU accession next year would need an "amending treaty", providing an easy opportunity to lever any required alterations to enable EU "economic government".

The first step is for the 16 eurozone leaders to agree unanimously on the text, but Prime Minister Gordon Brown and his officials will want a close look at the precise wording and its possible implications.

So will the leader of the Opposition, David Cameron, who would have to face up to the issue if the Tories win the general election.

Meanwhile, the bulk of the document concerned the immediate bail-out plan for Greece, stating that any package of measures would involve "substantial" IMF financing and a "majority" of European funding, with eurozone member countries declaring themselves "ready to contribute to co-ordinated bilateral loans".

The European Commission backed the plan, saying it was "broadly in line" with its own proposal unveiled last week.

That called for "an instrument for co-ordinated assistance" for Greece, subject to strict conditions linked to Greek pledges to meet deadlines for reducing its massive budget deficit.

Agreement on yesterday's eurozone document would not imply "immediate activation" of a new bail-out scheme, said the commission. But if and when activated, it could involve finding more than 20 billion between the eurozone countries, on a voluntary basis.

Who would agree to stump up how much is not under discussion at this stage, and eurozone countries would be expected to contribute on the basis of their respective capital vested in the European Central Bank.

A Greek tragedy?

THE Ancient Greeks knew a thing or two about life, the universe and everything (as well as money and good governance). Perhaps their descendants should have listened more closely to wisdom like:

"There's nothing in the world so demoralising as money"

Sophocles

"Where some people are very wealthy and others have nothing, the result will be either extreme democracy or absolute oligarchy, or despotism will come from either of those excesses"

Aristotle

"How many things I can do without!"

Socrates

"Most excellent man, are you who are a citizen of Athens – the greatest and most famous for wisdom and power – not ashamed to care for the acquisition of wealth?"

Socrates

"Virtue does not come from money, but from virtue comes money and all other good things to man, both to the individual and to the state"

Socrates

"I am not Athenian or Greek but a citizen of the world"

Socrates

"Crito, we owe a cock to Aesculapius; please pay it and don't forget it"

Socrates (his last words)