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EU-SUMMIT-ECONOMY
EU leaders split on Macron-inspired eurozone overhaul
BRUSSELS, Dec 15, 2017 (BSS/AFP) – EU leaders will wrangle over ways to
forge a stronger eurozone on Friday, with hopes of sweeping reforms dashed by
political limbo in Germany and waning interest.
Meeting without departure-bound Britain, the bloc’s 27 leaders have been
tasked by EU President Donald Tusk to speak freely about their often clashing
visions for the single currency’s future at a summit widely expected to be
dominated by Brexit.
Overhauling the eurozone and making it more resilient to economic shocks
has been a top priority of French President Emmanuel Macron, as well as
European Commission head Jean-Claude Juncker.
But Macron’s ambitions have been stymied by political uncertainty in
Germany, where a weakened Chancellor Angela Merkel is still trying to form a
government after the pro-business FDP party abandoned talks amid doubts about
eurozone reform.
In the eurozone’s usual political split, rich countries led by austerity-
minded Germany are reticent to adopt policies that share risks with their
heavily indebted eurozone partners, such as France, Spain, Italy or Greece.
“When it comes to European monetary union, the divide is — and sorry for
this geographical simplification — between north and south,” said Tusk as he
arrived for the first day of the two-day summit.
The resistance has blocked Macron’s idea of a eurozone budget and held up
the creation of a Europe-wide deposit insurance scheme, the last remaining
pillar of the banking union.
“To us, it is more important to make some member states more resilient for
the next financial crisis,” an EU diplomat said.
– ‘Large consensus’ –
The loss of momentum was already made clear in proposals last week by the
European Commission, the executive arm of the EU, that put off more ambitious
ideas, such as the creation of a European finance minister, until after
European elections in 2019.
The idea is to discuss a range of topics on Friday, with a further summit
in June to table concrete decisions, though even this seems ambitious given
the uncertainty in Berlin.
According to Tusk, there exists a “large consensus” to create a European
Monetary Fund that would function as a financial firewall to any new
financial crisis and handle bailouts.
There is also support to complete the banking union, he added.
French Minister Bruno Le Maire this week indicated that France had
accepted the delay in achieving Macron’s vision, with the proposals for a
eurozone minister and budget only a “last step” on a long path to reform.
But on the sidelines of the summit, a French official denied any “lack of
ambition”.
“We must use the next six months to reach agreement — particularly France
and Germany — which can then spur movement,” the official said.
BSS/AFP/RY/09:05 hrs