SHINING EXAMPLE Merkel starts ‘rainy day fund’
GERMANY TO HELP POORER COUNTRIES ‘CATCH UP’ Chancellor’s budget falls short of the range proposed by France’s Macron.
German Chancellor Angela Merkel delivered a long-awaited answer to French President Emmanuel Macron’s ambitious call for European Union reforms yesterday, offering olive branches on investment and help for debt-mired eurozone member states.
More than a year after Macron took office with the stated mission to bolster the EU and make it more responsive to its citizens, Merkel’s counteroffer comes at a time of heightened concern about the future of the bloc due to political turmoil in Italy and Spain and transatlantic tensions.
Merkel told the Frankfurter Allgemeine Sonntagszeitung ahead of a crunch EU summit this month that Germany, as the eurozone’s top economy, would support an investment budget whose total would be “at the lower end of the double-digit billions of euros range”.
She said the “rainy day fund”, as it has been dubbed, would serve to help even out economic imbalances between richer and poorer European countries “which need to catch up in the areas of science, technology and innovation”.
“We need quicker economic convergence between the member states,” she said.
“To do that, we have to strengthen investment capability with the help of additional structural policies,” she said, adding that the fund would be phased in gradually and then evaluated in terms of its effectiveness.
Although Merkel’s budget target falls short of the range proposed by Macron, it represents a concession of sorts to his view that an excess of austerity has undermined faith in the bloc.
Merkel also addressed plans to upgrade the European stability mechanism, which oversees bailout loans to troubled member states, such as Greece, into a European Monetary Fund.
“We aim to make ourselves a little more independent of the International Monetary Fund,” she said.
She proposed offering shortterm credit lines to stricken countries, but maintained strict conditions for support: “always subject to special conditions of course, for a limited amount and with complete repayment”.
Germany and France, traditionally seen as the twin engines of European integration, plan to hold talks before the EU summit at the end of the month to coordinate their positions on reform of the bloc after Britain’s exit.
The EU summit is seen as the last chance before European elections in May 2019 to get a few tangible projects on the road. – AFP