A €300m (£236m) investment programme proposed by incoming EU president Jean-Claude Juncker will form the basis of the bloc's fiscal union, a senior EU politician has said.
In an interview with EUobserver, Laszlo Andor, the EU's commissioner for employment, social affairs and inclusion, said Juncker's effort to create an investment programme "is an attempt to bring in elements of a fiscal union without calling it a fiscal union".
"If we are honest, we will say publicly that this money either has to be printed or transferred," Andor added.
Juncker called for the investment package back in July, in an attempt to revive the ailing European economy. The programme would kick-start the "reindustrialisation of Europe" he said.
The cash will be raised from a variety of sources including existing budgets and the European Investment Bank. Andor favours a large-scale investment programme to reverse what he sees as the damaging effects of austerity.
He argued Germany had a critical role to play in stimulating growth:
By boosting investment at home, Germany would do a big favour to itself but also to the rest of the community at the same time.
However, he conceded a fiscal stimulus programme would be insufficient without action from the European Central Bank to counter the risk of deflation.
He said this would be challenging given that "whenever it wants to function as a central bank immediately finds itself under fire and the subject of various legal attacks".