Euro zone will integrate or slowly fall - EU's Rehn

BRUSSELS (Reuters) - The euro zone will either undergo much deeper integration or will gradually fall apart, EU Economic and Monetary Affairs Commissioner Olli Rehn told the European Parliament on Wednesday.

"The economic and monetary union will either have to be completed through much deeper integration or we will have to accept a gradual disintegration of over half a century of European integration," Rehn said in a prepared speech.

Some of the integration may have to be accomplished through a change to the European Union treaty, and although it would not be an immediate solution to the debt crisis, it would create a stability union to prevent crises in the future.

Germany and France are pushing for changes to the EU's Lisbon Treaty, the fundamental law underpinning the union, to introduce much stricter controls over euro zone national budgets and prevent unchecked debt growth.

"Let's be clear: a Treaty change cannot offer an immediate contribution to the solution to the current crisis. But it is true that by working to embed stricter discipline and stronger governance into the Euro area in particular, we may help to prevent a future crisis by creating a real stability union," Rehn said.

Euro zone officials say that if Berlin and Paris cannot get all of the 27 countries of the European Union on board to impose the rules aiming for a euro zone fiscal union, they could go for a treaty just for the 17 members of the euro zone.

Rehn said, however, that the whole union should hold together rather than create separate treaties for the euro zone.

"The Commission's view is that any Treaty change should be based on the principle of one Union, based on the current institutional framework," he said.

"European integration can only be achieved by a single legal framework of one Union. That is the best way of building a stability union, in fact a true economic union," he said.

(Reporting By Jan Strupczewski; editing by Robin Emmott)