"We propose to build on the success of the European Stability Mechanism, turning it into a European Monetary Fund. The transformation of the ESM to the European Monetary Fund will help to more efficiently deal with future crises," Valdis Dombrovskis, the European Commissioner for the Euro and Social Dialogue, told reporters after the Commission's meeting.
Under the Commission's proposal, the new fund would have the same financing capacity as the ESM, at 500 billion euros, but it would have to respond to financial shocks faced by Eurozone countries in a more rapid and more transparent way.
The EU's executive body expects the EU Council and the European Parliament to agree by mid-2019 on the establishment of the EMF.
The Commission on Wednesday also issued two communications that propose to consider establishing the post of a European minister of economy and finance and creating a separate Eurozone budget line within the overall EU budget.
The three proposals were first publicly mentioned by European Commission President Jean-Claude Juncker said in his State of the Union speech in mid-September.