Spain’s prime minister has proposed setting binding economic objectives for the EU’s member states under a 10-year plan to boost growth and competiveness.

Jose Luis Rodriguez Zapatero said “corrective measures” were needed under the 2020 Strategy if the EU wanted to compete and become more prosperous.

He was speaking ahead of the formal inauguration of Spain’s EU presidency.

Spain’s proposal may alarm members of the 27-nation bloc, which are concerned by any potential loss of sovereignty.

“We need to have a vision, in which the European interest is the vision of every member-state,” Mr Zapatero told journalists in Madrid.

“If Europe wants to keep its strength then it must unite in a globalised world. We need to change the direction the debate is taking.”

The EU’s so-called 2020 Strategy is to be thrashed out in a series of meetings over the next six months.

It is designed to take forward the Lisbon Agenda, a 10-year economic plan made in 2000 by the EU in an attempt to increase the bloc’s competitiveness, stimulate job growth and boost investment in research and development.

‘Incentives’

The Lisbon Agenda is widely believed to have failed. Mr Zapatero suggested this was down to the voluntary nature of the agreement struck in 2000.

The path ahead is of more economic union Jose Luis Rodriguez Zapatero

“There is awareness of the need for more economic union,” he said.

Mr Zapatero cited the Single Market and the eurozone Stability and Growth Pact (SGP) as examples of successful economic co-operation.

Both contain sanctions in case of transgressions, though the SGP has been progressively loosened and no financial penalties have ever been levied.

Pressed repeatedly for detail, Mr Zapatero remained vague about what sort of areas might merit sanctions.

But he suggested that if the EU agreed to make a major investment in information technology, for example, then member states would need “incentives” to make sure that objectives were met.

Such an idea would need unanimous approval to become EU policy, and would cause deep alarm in the governments of many members, which have in the past been concerned about any potential loss of sovereignty.

But Mr Zapatero insisted that there was an audience for his ideas.

France, he said, was in favour of binding objectives, and “those that are more reticent are more open [than they were] to the idea”.

“The path ahead is of more economic union,” he added.