“The deal reached last night is a new departure for the EU”, said Martin Schulz, the leader of the Social Democrat party (SPD), speaking on 12 January after talks with the Christian Democrat party (CDU) under Angela Merkel and its sister party from Bavaria (CSU) under Horst Seehofer to prepare a coalition government in Germany.
The compromise reached has still to be validated by the SPD congress on 21 January before talks strictly speaking begin. The government contract should then in turn be validated by SPD militants. The aim is to have a government by Easter.
Europe takes up the whole of the first chapter of the compromise presented on Friday morning, after a final negotiating marathon. “We want to strengthen the European Union financially” during preparation of the post-2020 financial framework, the document announces (see EUROPE 11936). This includes an increase in the German contribution to the EU budget.
“We support the setting in place of specific budgetary reserves for economic stabilisation and social convergence as well as to support structural reforms in the eurozone, which could be the point of departure for the future investment budget”, the document continues.
The future partners hope to “develop further the European Stability Mechanism to make it a European monetary fund under Parliamentary control”. On the other hand, the compromise says nothing about the creation of a possible European finance minister, which would result from the fusion of the functions of European Commissioner for economic and financial affairs and the president of Eurogroup (see EUROPE 11920).
In addition, the future partners place emphasis on economic coordination, social justice and the fight against tax fraud. The compromise notably supports notably the swift setting in place of a common tax base for corporate tax and “equitable taxation of large enterprise, especially Internet giants Google, Apple, Facebook and Amazon”.
They then underline the struggle to overcome social dumping, hoping to strengthen “the principle of equal pay for equal work in the same place, as part of a social pact”. They call for “better coordination of labour market policy”.
A halt to taking in refugees.
At the centre of last September’s electoral campaign, the question of immigration was this time kept low-key during the press conference of the three negotiators.
On the other hand, the compromise confirms that a brake has indeed been put on taking in refugees, in response to the entry of the extreme right party, AfD, to the Bundestag. It sets a threshold of 180,000 to 220,000 refugees into Germany each year. Only 1,000 refugees with subsidiary protection may exercise their right to family reunification annually. Inversely, the agreement provides for a moratorium on Germany taking in 1,000 refugees currently in Greece and Italy.
“We are determined that Germany will bring all its economic and political weight to bear in favour of the wider European project”, Martin Schulz told the press. “A strong Europe is in the interest of a strong Germany”, he added, although he will have a struggle to convince the base of the Social-Democrat party to take part in a new government coalition. On the other hand, Chancellor Angela Merkel and Horst Seehofer remained silent before the press on the European question.
Satisfaction at European level
Since the European Commission met the Bulgarian presidency of the Council of the EU in Sofia on Friday (see related articles), the president of the European Commission Jean-Claude Juncker said he was “completely satisfied” with the deal reached between the German Social Democrats and conservatives. “This is a positive contribution, constructive and forward-looking”, he said. Bulgarian Prime Minister Boïko Borissov stated: “Germany is one of the driving forces of the EU and German stability has an impact on the EU as a whole”.
In Paris, French President Emmanuel Macron took the view that the terms of the provisional agreement were “more favourable to the European project” than previous draft agreements. “I see it as a great move forward on the European subjects that I believe in and have defended”, he added.
The proposals made by the French president on the future of the EU, notably on reform of the eurozone, which were presented end September during his speech at the Sorbonne (see EUROPE 11870), are more likely to receive a positive echo from a German government in which Social-Democrats form a part. Once approached to govern with the CDU, the German liberals of the FDP party are in fact more sceptical about economic recovery through investment or the creation of a budgetary capacity proper to the eurozone. (Original version in French by Nathalie Steiwer and Mathieu Bion)