The leaders of Germany and France meet on Thursday to try to work out a common position on reforming the euro zone, a sensitive issue that is testing the new government in Berlin just a month after it took office.
Chancellor Angela Merkel, who hosts President Emmanuel Macron for the working meeting, is under pressure from her conservative bloc in parliament not to agree to any reforms that result in German taxpayers funding what they see as profligate euro zone peers.
Macron’s vision includes turning Europe’s existing bailout fund into a European Monetary Fund (EMF), to act as a buffer in any future financial crisis in the bloc.
|German Chancellor Angela Merkel and French President Emmanuel Macron hold a news conference at the building site of the Humboldt Forum in Berlin, Germany, April 19, 2018. Kay Nietfeld/Pool via Reuters
He has also suggested the euro zone have its own finance minister and, at one point, floated the idea of a budget for the currency bloc worth hundreds of billions of euros.
“We have lots of institutions, why another one?” asked Ralph Brinkhaus, deputy leader of Merkel’s conservative bloc in parliament and a budget expert.
“And on the euro zone budget, why should the euro zone, in addition to the European Union, have an extra budget?” he told broadcaster ARD. “Why something else again?”
At a meeting with conservative lawmakers on Tuesday, Merkel trod a careful line between Macron’s drive for bold reform and their push to retain scrutiny over any European Monetary Fund developed out of the existing euro zone bailout fund.
Officials in Berlin and Paris both express confidence that they will find a common stance before an EU summit on June 28-29.
“Let me reassure you that the silent, secret, demanding work under way will allow us to reach a true Franco-German roadmap by the time of the next European summit in June,” French Finance Minister Bruno Le Maire told lawmakers in Paris on Wednesday.
In Berlin, a government spokeswoman said Germany and France “have the firm desire to find a joint way forward”, echoing Merkel’s own cooperative tone at a news conference on Tuesday.
France and Germany, which account for around 50 percent of euro zone output, are essential to the reform drive. But while they often put on a strong show of political unity and shared intent, the devil is frequently in the detail.Reuters