By Jan Strupczewski
BRUSSELS (Reuters) - The European Commission will propose on Wednesday deeper euro zone integration that would help unite the broader European Union rather than just the single currency area.
The Commission, the EU's executive arm, will present a package of ideas aimed at making the 19 countries sharing the euro more resilient to potential future crises and united around the euro currency as Britain leaves the bloc in 2019.
But such plans have sparked concern in eight non-euro countries that deeper integration will make them second-class members of the EU, with less say and less in funds in the future.
To alleviate such fears, the Commission proposals will follow the principles of building EU unity and increasing the democratic accountability of euro zone institutions. But some of the ideas clash with what some euro zone leaders want.
French President Emmanuel Macron has called for creating a large euro zone budget of several hundred billion euros, a euro zone finance minister and a euro zone parliament.
The EU executive, however, is likely to propose creating only a dedicated line for the euro zone within the wider EU budget that, in total, is worth around 100 billion euros.
Instead of a euro zone finance minister, there should be a pan-European Minister of Economy and Finance, the Commission is likely to say. The European Parliament should be left undivided.
Other euro zone integration ideas, floated by Germany, include transforming the euro zone bailout fund into a European Monetary Fund and setting up a sovereign insolvency mechanism to raise market pressure on government fiscal policy.
But the Commission will call for the bailout fund, which is now owned and run by euro zone governments, to become an EU institution that would be subject to European Parliament's control. This will not fly with governments, officials said.
The Commission is also likely to say that the European finance minister, a post that would only be set up in 2025, should be in charge of overseeing structural reform efforts and coordinating economic and fiscal policy in the euro area.
Presiding over any kind of euro zone bailout fund, the EU finance minister should also be a senior member of the Commission and responsible before the European Parliament, the Commission is likely to propose.
Under the current arrangement, the chair of the euro zone finance ministers, the closest thing the bloc now has to a single finance minister, often testifies before the parliament's economic committee, but it has no power over him or her.
There is no appetite among euro zone finance ministers now to allow the Commission, which is only an observer at their monthly meetings, to chair the talks.
The Commission is also likely to call for a swift completion of the EU's banking union by setting up a Europe-wide bank deposit insurance scheme, something that Germany insists can only happen after the bad loans on banks' books fall sharply.
The ideas will be discussed by all of the European Union's leaders except Britain at a special euro summit on Dec. 15.
(Reporting By Jan Strupczewski; Editing by Hugh Lawson)