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France and Germany push for compromise on eurozone reform
PARIS, June 10, 2018 (BSS/AFP) – France and Germany are “determined” to reach
a compromise on President Emmanuel Macron’s proposals for a shake-up of the
eurozone, a French government source told AFP Sunday after marathon talks
between the two countries.
Paris and Berlin are racing to bridge the gap between Macron’s ambitious EU
reform agenda and Chancellor Angela Merkel’s more prudent approach by a
crunch eurozone summit on June 29.
French Finance Minister Bruno Le Maire spent nearly 14 hours holed up with
his German counterpart Olaf Scholz at a Paris hotel on Saturday, the source
told AFP.
While the talks, which lasted into the early hours of Sunday, did not yield
an agreement the ministers discussed “all the unresolved issues” and made
“substantial progress”, the source said.
“We still have work to do before agreeing on a roadmap,” the source
continued, adding “there is agreement on nothing until there is agreement on
everything” and that Le Maire and Scholz planned further talks in the coming
week.
Macron is on a drive to reconcile Europeans with the European Union after
years of austerity and mass migrant flows have fuelled the rise of populist
and nationalist parties.
He has seized on Britain’s vote to leave the bloc as a chance for closer
integration, with the aim of adopting sweeping changes before European
elections in May 2019.
But Germany and other northern European states have baulked at his calls to
give the eurozone its own big “rainy day” fund, fearing the more fiscally
prudent north will have to pick up the tab for overspending by the more
profligate south.
In an interview last weekend, days after a eurosceptic government took
office in Italy, Merkel made some concessions.
She said the eurozone’s top economy would support Macron’s call for an
investment fund to help poorer European countries catch up in the areas of
science, technology and innovation.
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– ‘Historic opportunity’ –
But the size of the fund remains a major bone of contention, with Merkel
saying it should be “at the lower end of the double-digit billions of euros
range” while Macron has called for a budget amounting to “the equivalent of
several points of the GDP of the eurozone”.
Merkel also detailed her proposals to upgrade the eurozone’s bailout fund
into a European Monetary Fund — under strict lending conditions and on
condition that member states retain oversight over the body.
Macron’s office welcomed the concessions but during a visit to Berlin
Friday Le Maire called on Germany “to go further”.
“It is a courageous response that goes in the right direction,” Le Maire
told AFP.
“Is it sufficient? No. We think you have to go further and that this is a
unique, historic opportunity to make very significant progress toward better
integration of the eurozone,” he said.
BSS/AFP/SR/1820 HRS