THE HEAD OF the European Commission has urged Europe to get more united as it grapples to contain a debt crisis in Greece that threatens the survival of the euro currency itself.

In a ‘State of the Union’ speech at the European Parliament in Strasbourg, Jose Manuel Barroso came down firmly in favour of the 27-nation EU having a stronger central government, and promised to advance plans for common Eurobonds.

“If we do not move forward with more unification, we will suffer more fragmentation,” he told MEPs. ”I think this is going to be a baptism of fire for a whole generation.”

Barroso asserted that the EU would be able to summon the political will to come up with overall solutions to its crises and proposed a tax on financial transactions, which he said could raise €55 billion a year.

He also pledged to come forward with concrete proposals on the introduction of so-called ‘Eurobonds’ within weeks – in a system he said would “reward those who play by the rules”.

There was “no excuse for not doing it, and not doing it now,” Barroso said of the Eurobond proposal, which is opposed by Germany.

While Barroso said some of the options he would present could be adopted without any treaty change, under the terms of the Lisbon Treaty, other options he may bring forward may require the adoption of a newer treaty.

If this was the case, Ireland would be required to hold a referendum on ratifying it.

His comments came as lawmakers in Finland and Germany prepare to vote on measures that will give the 17 countries that use the euro more powers in fighting the debt crisis which has already seen three states – including Ireland – forced into needing bailouts.

Greece is lumbered with so much debt that many in the markets think it will have no option but to default.

As well as facing a crisis in the eurozone, the wider EU is dealing with problems afflicting its borderless travel area that many observers say call for stronger central management of the union.

More integration though would mean that member countries would lose some powers they consider to be part of national sovereignty.

Additional reporting by AP