European leaders believe the eurozone needs more government oversight and much closer ties in the banking and financial system, according to a European Union summit draft paper obtained by Reuters.
Many analysts have warned that Europe's experiment with a single currency, the euro, has failed. Moreover, they believe the currency is hurting several European countries like Spain and Greece, which are in serious recessions.
"The longer Europe puts up with the fantasy that a single currency is essential to its prosperity, the longer Italy, Spain, Greece, and others will flirt with financial ruin and self-destruction," Peter Morici, an economist and professor at the University of Maryland's Robert H. Smith School of Business, warned.
"No bailout can save the Mediterranean economies from recurrent crises as long as they use the same currency as Germany and other northern states," he said.
EU officials, however, believe they have to keep the euro -- and they want stronger government controls over European economies.
"Recent developments have demonstrated the need to take the EMU (Economic and Monetary Union) to a further stage," the draft conclusions for the June 28-29 summit of EU leaders stated.
"The new stage will build on deeper policy integration and coordination," the leaders said. "There is a need for more specific building blocks centered around a much stronger banking and fiscal integration, underpinned by enhanced euro governance."