European authorities have unveiled their vision for the future, which gives them much greater powers.
It includes the creation of a European treasury, which would have powers over national budgets.
European Commission President Jose Manuel Barroso said it was "a defining moment for European integration".
The document, released ahead of Thursday's EU summit, said greater fiscal union could lead to common debt being issued by eurozone countries.
There would also be banking union, with a single European banking regulator and a unified deposit guarantee scheme.
The document was released by European Council President Herman Van Rompuy and was drawn up with the presidents of the European Commission, the Eurogroup and the European Central Bank.
Mr Van Rompuy said it was "not meant to be a final blueprint", but that he expected "to reach a common understanding amongst us on the way forward" at Thursday and Friday's summit.
Mr Barroso said the guiding principle was that "greater solidarity and greater responsibility must go hand in hand".
Proposals in the report included:
Earlier, German Finance Minister Wolfgang Schaeuble also called for there to be a European finance minister, with the power to veto national budgets as well as an elected president of Europe.
French, German, Spanish and Italian finance ministers are meeting on Tuesday to discuss closer union.
French Finance Minister Pierre Moscovici has said Thursday's EU summit should, "lay the groundwork for the second phase of the euro".
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