The eurozone's plans to move towards a banking and fiscal union should help market confidence, but investors must give Europe time for the process, EU Economic and Monetary Affairs Commissioner Olli Rehn said on Friday.
The eurozone's banking and economic integration plans are to show investors that the common currency, the euro, is an irreversible project and that it will not fall apart, but become stronger.
But growing investor concern that Greece may leave the euro area has depressed the currency and increased the borrowing costs of Spain and Italy, forcing Madrid to seek emergency eurozone lending to recapitalize its banks.
"I know that financial markets move fast. But we lose the process of European integration, if we lose our citizens. That we cannot afford," Rehn said in a speech to the Goldman Sachs Annual European Financial Services Conference in Brussels.
"Once this is kept in mind, an early confirmation of the steps to rebuild the EMU will underscore the stability and solidity of the euro, and help, even in the short term, to restore confidence - of markets and citizens alike," he said.
Eurozone leaders will discuss what needs to be done and how to reach a full economic union in the 17 countries sharing the euro at a summit on June 28-29.
While the economic integration process is likely to be politically difficult and take years, it would lead, in the end, to joint eurozone debt issuance — which markets would very much welcome.
"We need to map out the direction and steps towards a full economic union to complete our monetary union, including through a financial union," Rehn said.
"Demonstrating the political commitment of member states to the euro will be a key part of restoring confidence in the euro area," he said.
He said the main elements of a financial union would include a single rule book on capital requirements, integrated financial supervision, a common resolution authority and a single deposit insurance scheme.
"All these common and integrated elements should be put together into the same overall framework, intended for the 27 member states, while allowing deeper integration and stronger requirements for the euro area as necessary," he said.
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