Brussels, 31/08/2015 (Agence Europe) - The French Minister for the Economy, Emmanuel Macron, believes that in order to consolidate Economic and Monetary Union (EMU), France needs to carry out in-depth reforms of its economy, whilst Germany needs to deal with the taboo of fiscal equalisation.
“If we want genuine economic and monetary union, we will have to fight for it. For us the French, this means carry out reforms for good to break old habits. And this also calls for Germany's taboos to be broken. If the member states are not ready, as they have not been as yet, for any form of financial transfers within the monetary union, then we can forget the euro and the eurozone”, Macron said in an interview published by the German daily newspaper Süddeutsche Zeitung on Monday 31 August (our translation). Calling on Berlin “not to get stuck in a purely number-crunching mindset towards Europe and its euro zone partners”, he recalled fighting in his country in favour of economic policies to reinforce “responsibility”, particularly budgetary responsibility, and “competitiveness”.
The Minister has taken up the cause of the proposal by French President François Hollande to set in place an economic government in the eurozone, with its own budgetary capacity and controlled by a parliament restricted to eurozone MPs (see EUROPE 11374 and 11363). These ideas were put by the French head of state to the German Chancellor, Angela Merkel, at their meeting in Berlin on 24 August, during which the migration challenge and the situation in Ukraine pushed the question of reinforcing the EMU into second place. During this meeting, Hollande took pains to distinguish between what can be done without having to change the treaties and measures which would call for treaty change. His aim is not to create confusion or for proposals on consolidating the eurozone to go on a “collision course with the United Kingdom's demands” for EU reform, a French government source told us. The opportunity to present Franco-German orientations for building on the joint proposals of May has not yet presented itself, the idea at this stage being mainly to breathe life into the report of the 'five presidents' on EMU reform (see EUROPE 11340).
At the helm of this economic government, Macron would place a “Commissioner with extended competences”, who would be “more than just a euro finance minister”, but would also be capable of “allocating resources for investment or discussing employment market policy”. Although he did not say that this position would result from a merger of the posts of European Commissioners and President of the Eurogroup, the French minister went on to argue that this Commissioner should have as high a budget as possible in order to be credible, so as to help the countries to absorb the costs of the reforms they set in place. Why not base this on the European Stability Mechanism (ESM), the Eurozone bailout fund, and authorisation to borrow on the markets. According to Macron, a partial pooling of the existing debt is not possible and the creation of a new European tax would take a considerable amount of time.
A medium-term project of this kind would “naturally” require treaty change, the Minister explained. “We need to start preparing the amendments to the European treaties now. We can implement them in autumn 2017 once the national elections in France and Germany are behind us”, he said, for a reformed EMU “in 2018 or 2019”. (Mathieu Bion)