Merkel answers on EU reforms

GERMAN Chancellor Angela Merkel yesterday delivered a long-awaited answer to French President Emmanuel Macron’s ambitious call for European Union reforms, 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 response 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 which would have a 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 the fund would be phased in gradually and then evaluated in terms of its effectiveness.

Merkel also addressed plans to upgrade the European Stability Mechanism (ESM), which oversees bailout loans to troubled member states, such as Greece, into a European Monetary Fund.

She proposed offering short-term credit lines to stricken countries, “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 later this month to coordinate their positions on reform.

The EU summit is seen as the last chance before European elections in May next year to get a few tangible projects on the road and demonstrate to frustrated voters Europe’s ability to deliver on its promises.

Macron has repeatedly expressed impatience with what he sees as foot-dragging by Merkel, who was tied up with five months of coalition building after an inconclusive general election in September. – AFP