The DeutscheBundesbank proposed that the European Stability Mechanism should betransformed into the region's leading fiscal authority in order to counterfuture crises in Europe, Bloomberg News reported July 18, citing the centralbank's monthly report.

The Bundesbank suggested that the ESM's responsibilitiesshould include some of those currently held by the European Commission and theECB, includingassessing the economic prospects, debt sustainability and financial needs of acountry asking for a bailout. It would also oversee aid programs and negotiate restructuringsif necessary.

The German central bank is also pushing for a change in theterms of government debt issuances, which would allow for easier restructuringand a maturity extension if an issuing country enters an aid program.