EU backs modest eurozone reform despite French push
BRUSSELS: EU leaders will approve a modest list of euro single currency reforms that are a far cry from the vast overhaul to the European project sought by France.
The EU’s heads of state and government, minus Britain, are working off proposals thrashed out by ministers during marathon talks last week, capping 18 months of stop-start negotiations.
The proposals are meant to strengthen the financial plumbing of the European economy, but ignore far grander visions such as designating a eurozone finance minister or setting up a European version of the International Monetary Fund.
The centrepiece will be an agreement to pursue a very scaled-back version of a eurozone budget, now referred to as a budgetary ‘instrument’ in order to soothe the anxieties of fiscal hardliners the Netherlands.
French President Emmanuel Macron, weakened by antigovernment protests back home, hailed the plans as a symbolic breakthrough towards a more closely-knit European Union.
“Tomorrow our conclusions will mark a real banking, financial and budgetary advance... with a more united eurozone,” Macron told reporters on Thursday as he arrived for the two-day summit in Brussels.
The new scheme will have no hard figure attached and will be linked to the seven-year overall EU budget that will be negotiated by the 27 member states over the next year.
Agreement was more easily found on expanding the responsibilities of the European
Tomorrow our conclusions will mark a real banking, financial and budgetary advance... with a more united eurozone. Emmanuel Macron, French President
Stability Mechanism (ESM) – the firefighter for eurozone countries with serious debt problems.
Ministers also agreed that the ESM would serve as a final backstop in case a major crisis hits Europe’s biggest banks.
Most of the reforms were agreed beforehand by France and Germany, Europe’s twin anchors of unity that make up nearly half of the eurozone economy.
But the process bogged down due to the weak government in Berlin and irritation by smaller EU members, led by the Netherlands, at having the EU’s future dictated by the bloc’s biggest powers.
These small, liberal- minded countries are dubbed the new Hanseatic League, named after the medieval confederation of trading city-states on the shores of the North and Baltic seas.
Together the countries – which include the Baltic countries, Finland and Ireland – make up the same GDP as France alone, but their influence has grown, with the discreet backing of Berlin.
Paris is riled by the group and French Finance Minister Bruno Le Maire has warned against ‘closed clubs’ that risk hurting the EU project. — AFP