Aves Macron’s big idea in tatters
Reluctant to fund a massive increase in EU spending after the election setback
oject. France government t still has an nd is plagued form, it could r stagnation. fiscal policy Macron’s imeven greater is well aware ndow of opout the euro’s s. The bloc’s t needs to be turn. re still shaky. union to sue emergency liquidity, but it still has no pan-European deposit insurance scheme.
The roadblock, of course, is the stern German taxpayer. Completing most of these projects requires Berlin to underwrite them, while abandoning its veto over when and how the money is spent. That is something that Angela Merkel would never countenance.
Macron’s election had raised hopes of a breakthrough. Finally, a French president who understood the need to improve competitiveness — and who, if he achieved it, might show Germany that it could take the risk of shoring up the euro’s crucial institutions.
There was talk of a “grand bargain”: Macron would fix France and support the creation of EU mechanisms to enforce fiscal discipline and economic reform. In return, Merkel would be willing to release some cash. Although she would never go all the way and write the Eurozone a blank cheque, it was thought she might be willing to let the EU sweeten the pill of economic reform by funding a bigger budget. Unfortunately for Macron and the euro, Germany’s election results make all of this less likely. First out of the blocks on Sunday night was Christian Lindner, head of the right-wing, promarket FDP and very likely Merkel’s biggest coalition partner. “Providing money for French state spending or to compensate for Silvio Berlusconi’s mistakes is inconceivable for us,” he declared. Even worse, Merkel’s party, the centre-right CDU, might be about to lose the hitherto staunch support of its long-standing ally, the Bavarian CSU. The only counterbalance is the Green Party, which will be needed in the coalition if the government is to wield a majority. Juliet Samuel is a columnist for the Daily Telegraph.