Brussels, 30/09/2014 (Agence Europe) - Klaus Regling, Director General of the European Stability Mechanism (ESM), the eurozone's permanent bailout fund, said on Tuesday 30 September that he was in favour of the creation of a post of “European finance minister” or of reinforcing the role of the commissioner for economic affairs. “We should start to think about more institutional changes”, he said.
Regling said at the launch of Marcel Fratzscher's book, The German Illusion, at the European Parliament that he would be in favour of a commissioner with reinforced powers, who “would have the right to veto national budgets if these infringe the budgetary rules laid down and create negative fallout for the eurozone”.
The idea of a commissioner with the authority to reject a draft budget was put forward by the German finance minister, Wolfgang Schäuble, who drew a parallel with the commissioner for competition policy, who is able to reject state aid. In June of this year, when he was still teh commissioner for economic and monetary affairs, Finland's Olli Rehn told EUROPE that he took the view that the Commission, together with the Council, already had “considerable competences in terms of coordinating the economic policies of the eurozone states”. He went on to add that recent reforms, together with the possibility of sanctions, had already borne fruit in reducing public deficit and stabilising the level of indebtedness (see EUROPE 11090).
“The contractual arrangements and a limited budgetary capacity to encourage structural reforms are good ideas”, said Regling. He also referred to the idea, which is championed by the European Parliament, of transposing the ESM into the community acquis. The ESM was in fact set in place by means of an inter-governmental treaty.
Lastly, in response to those who argue that austerity has been too harsh, Regling replied that this was an “incorrect analysis” and that, given the scale of the public deficits, there was no choice but to bring them down, whilst recognising that the flexibility of the pact had to be used. (EL)