Germany, France propose euro budget to bolster currency zone

Eurogroup chief sees ‘breakthrough’ in Franco-German budget bid

German Finance Minister Olaf Scholz (right) and French Economy, Finance Trade Minister Bruno Le Maire (left) give a press conference after a Eurogroup meeting on Eurogroup reform at the EU headquarters in Brussels on

Nov 19. (AFP) FRANKFURT, Nov 19, (Agencies): A top eurozone finance official says the 19 countries that use the euro will push ahead with discussions on a eurozone budget proposed by France and Germany to make the currency union more resistant to crises.

Mario Centeno, president of the eurozone finance ministers’ group, said that ministers had a “very good discussion” of the proposal at their meeting Monday in Brussels and that “the topic will remain on our agenda.”

French Finance Minister Bruno Le Maire said that “everyone is aware of the necessity of reinforcing the eurozone.”

A separate budget could help countries in difficulty stabilize their economies. Le Maire said that even though discussions were of small amounts, of 20-25 billion euros ($23-29 billion), “you need a starting point and a framework.”

Eurogroup chief Mario Centeno on Monday hoped a proposal by France and Germany on a eurozone budget was the much-needed breakthrough in a faltering reform drive but the Netherlands expressed major doubts.

The reform drive was the idea of French President Emmanuel Macron after winning elections last year but it has since lost momentum due to a weakened government in Germany and the French leader’s dwindling popularity at home.

In a last-minute effort to revive the reform push, France and Germany have tabled the broad outlines of a proposed eurozone budget to the ministers, a key proposal of Macron’s that has been scaled back to get Berlin on board.

Centeno, who presides the meeting of eurozone ministers and is also Portuguese finance minister, said the proposal was “a very important contribution”.

“It can be a sort of breakthrough ... it can be a very strong package to present to the leaders in December,” he added.

France and Germany together amount to roughly half of the eurozone’s economy, and are the driving force in managing the single currency, often leaving smaller countries in the background on big decisions.

Dutch Finance Minister Wopke Hoekstra warned that any proposal for a eurozone budget would have to be in the interests the Netherlands, one of the richest countries in the eurozone.

“Many questions remain. If this is not in the interest of the Netherlands or Dutch tax payer, then we are out,” he said.

“But we will now first listen to the explanation and hear what it is all about,” he added.