‘EU single currency reform won’t be perfect’

EMF should be independent of Commission: Regling

PARIS, Feb 19, (Agencies): EU Economic Affairs Commissioner Pierre Moscovici said Sunday he does not expect a “perfect” accord on reforming the single currency at an EU summit in June.

“We won’t get everything, we won’t have a perfect accord, but if there is progress on crisis management, the ability to combat shocks... we will have made a great step forward,” he told French radio RFI on the eve of a meeting of EU finance ministers in Brussels.

As the 19-nation currency area finally emerges from years of crisis, there is agreement in many eurozone capitals that it must be buttressed to better weather future economic storms -- but not all countries agree on how best to do it.

Moscovici said a “real window of opportunity” opened last year with the election of reformist President Emmanuel Macron.

The French leader has set out an ambitious vision for European reforms, including having a separate eurozone budget and finance minister.

But the window “will probably close” in the run-up to next year’s European Parliament elections, Moscovici said.

The left-right “grand coalition” reached in EU powerhouse Germany last week between Chancellor Angela Merkel and the Social Democrats is cautiously supportive of Macron’s reform proposals.

But Moscovici, France’s former finance minister, said Sunday that while he was in favour of a “real eurozone budget... we know we won’t have it”.

He said he nevertheless hoped “we take the first real steps forward” at the June summit.

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BERLIN: The European Monetary Fund (EMF) being planned to replace the eurozone bailout fund should be controlled by member states and independent of the European Commission, the fund’s head Klaus Regling said on Monday.

The Commission wants the European Stability Mechanism to become an EU institution governed by a separate treaty signed by eurozone countries. Regling said the ESM should be an intergovernmental body controlled by eurozone member states.

“It would be good for the ESM to be included in the EU treaty,” Regling told the Ausburger Allgemeine Zeitung newspaper.

“However, the path proposed by the Commission is ambiguous. What I would like for the ESM is a role similar to the European Investment Bank. It is expressly mentioned in the EU Treaty but is relatively independent of the Commission and largely controlled by the member states,” he said.

Such arrangements for the ESM are only achievable through modifications to the EU treaty, which is unlikely to happen in coming years, said Regling.

The Commission last year unveiled a package of proposals on deeper economic integration of the 19 countries that share the euro, aimed at making the single currency area more resilient to crises.

Those included turning the ESM into a full-blown European Monetary Fund.

The main task of the ESM now is to lend cash to governments that have been cut off from markets in exchange for reforms that put their economies back on track. It has helped Greece, Ireland, Portugal, Spain and Cyprus over the past few years.