Willingness to fix euro’s structural flaws fading fast

FRANKFURT, Germany, April 19, (AP): When Angela Merkel was re-elected as Germany’s leader in March, the way looked open for European nations to finally patch the remaining cracks in the euro — the structural flaws that threatened to break apart the shared currency in 2010-12.

Suddenly, those prospects for far-reaching agreements are fading, as one proposal after another falls by the wayside.

The reason: longstanding German fears of being handed the bill for financial profligacy in other member countries.

A long-awaited European Union summit June 28-29 may now produce vague agreements only on limited parts of wide-ranging proposals to strengthen the way the euro is set up. The bigger ideas for deeper eurozone integration, such as a common pot of money overseen by a European finance minister — an idea once allowed in principle by Merkel — are off the table. Prospects are also uncertain for plans to upgrade a bailout fund cobbled together during the crisis to a full-fledged European monetary fund to assist troubled countries.

German

resistance

bubbled up this week at a meeting of parliament deputies from Merkel’s Christian Democratic Union. Merkel told lawmakers that upgrading the taxpayer-backed bailout fund, the European Stability Mechanism, would require amending the basic European Union treaty, the dpa news agency reported. That condition would likely kill the idea, since treaty change would take years.

Things looked quite different a few months ago. French President Emmanuel Macron won a resounding victory in presidential elections in June and pushed strongly for new measures to strengthen the European Union generally, and the euro in particular, to overcome popular discontent fuelling anti-EU populist parties and candidates. Merkel cautiously allowed the possibility of a European finance minister and formed a government with the pro-EU Social Democrats.

But the opening for change didn’t last. The Social Democrat’s choice for finance minister, Olaf Scholz, made clear that not all Macron’s ideas could be realized. Macron and Merkel are to meet Thursday in Berlin for further discussions.