"A second stage should be envisaged for a country that persistently fails to meet its program targets," he added.
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"Under this second stage, euro area authorities would gain a much deeper and more authoritative role in the formulation of that country's economic policies," he said. "Implementing this idea of the second stage would evidently require a Treaty change. It would also imply a new concept of sovereignty."
(Reporting by Paul Carrel and Annika Breidthardt)