MercoPress. South Atlantic News Agency

EC president calls for decisive action on Euro banks recapitalization and Greece

Jose Manuel Barroso said confidence must be restored

The president of the European Commission called Wednesday for EU leaders to bring forward the introduction of a permanent rescue mechanism for states to mid-2012 from mid-2013 and called for more rigorous capital standards for banks.

“The roadmap charts Europe's way out of the economic crisis,” Jose Manuel Barroso told lawmakers in the European Parliament, outlining a plan ranging from the early introduction of the permanent European Stability Mechanism to “decisive action on Greece”.

He called on heads of state to back his five-point plan when they meet in Brussels on Oct 23.

Barroso also said there should be “a fully coordinated approach to strengthen Europe's banks”, based on a stricter assessment of bank health using a “temporary significantly higher capital ratio of highest quality capital”.

The head of the EU executive also spelt out how weak banks could be helped, saying national governments should provide support if investors cannot be found.

If states were not able to step in, banks could get assistance from the temporary euro zone bailout scheme, the European Financial Stability Facility (EFSF), he said.

“Confidence can be restored through an immediate deployment of all the elements needed to solve the crisis,” Barroso said.

The proposals also called for extra powers for the European Commission and the European Council - the body that hosts meetings of EU ministers - to intervene in the preparation of national budgets and in monitoring their execution.

“Only in this way we will be able to convince our citizens, our global partners and the markets that we have the solutions that measure up to the challenges all economies are facing,” Barroso