March 20, 2013 / 5:02 PM / 4 years ago

EU exec proposes new ways to coordinate euro zone economy

BRUSSELS, March 20 (Reuters) - The European Commission proposed new ways to coordinate euro zone economic policies, together with a cash incentive for change, as part of a plan to create an economic union to complement the single currency.

The European Union executive said on Wednesday euro zone states should discus important reforms with others in the single currency area before making the final decision to go ahead.

Special focus should be given to coordinating reforms concerning competitiveness, employment, product and services markets, network industries and tax systems, among others.

"That way, any positive or negative spillovers of the reforms on other EU countries can be properly taken into account early on in the decision-making process," the Commission said.

The EU executive arm also proposed to create a Competitiveness and Convergence Instrument (CCI).

This would allow the Commission to sign a contract with a euro zone government in which the country would commit to certain reforms and deadlines by which they would happen in return for financial support for the implementation of the changes, like for training or "active labour market policies".

The proposals are in line with what EU leaders asked for at their summit last December and will be discussed in more detail at their next meeting in June.

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