- 2018-09-26
Eurozone reform: clouds floating in the water?
"After years of crises, it is time to take the future of Europe in our own hands," European Commission President Jean-Claude Juncker said in a statement. "Fix the roof when the sun is shining. ."
The European colloquialism used by Juncker is equivalent to "preparing for a rainy day." The purpose of the euro zone reform plan is to ensure that the 19 euro zone countries are prepared when they encounter a "storm" similar to the 2008 financial crisis and the sovereign debt crisis. However, Eurozone countries have different opinions on how to repair the “roof” to prevent leakage.
With regard to the further integration of the euro area, the eight non-euro area EU countries also have doubts: Will they become "second-class citizens" in the EU in the future, have less say in the EU's fiscal decision-making process, and harder to get funding?
Macron proposed the establishment of a euro zone finance minister and a euro zone parliament to supervise and manage a unified euro zone budget with a scale of hundreds of billions of euros. The European Commission’s proposal is to provide “cash incentives” to member states that initiate structural reforms.
The European Commission supports the idea of establishing a "stability mechanism" in the euro area to provide assistance to individual euro area countries that have encountered economic crises. The current European Central Bank mechanism is difficult to cope with this kind of local economic crisis. But the European Commission did not mention the scale of investment funds.
The European Commission does not mention the establishment of a "European Finance Minister", but proposes to appoint an "Economy and Finance Minister" among the senior members of the European Commission to preside over the monthly meeting of the finance ministers of the Eurozone countries, which may be in November 2019. This post was formally established after the term of the European Commission took office. Finance ministers of various countries are not "cold" by the idea of letting European Commission officials preside over the regular meetings of finance ministers. Under the existing mechanism, the European Commission only attends the Finance Ministers' Meeting as an observer.
Germany supports the transformation of the existing aid funds for heavily indebted countries operated by the governments of the eurozone countries into the "EU Monetary Fund". The European Commission agreed, but proposed that this fund should become a permanent institution of the European Union and be subject to the supervision of the European Parliament. Governments of various countries may find it difficult to accept this plan.
Proposal from France: Germany does not participate, this is not okay
"Only the European Commission can make specific recommendations on the Eurozone and the European Union as a whole (reform), although some people would hope it would be best to mention nothing," the European Commission’s Commissioner in charge of economic affairs Pierre Moskovich said in News Said at the press conference.
***Radio reported that these remarks may imply that Germany does not support more radical reforms in the euro zone.
When it comes to EU financial affairs, Germany has always tended to be conservative. As the largest economy in the European Union, the "unified EU budget" means that Germany has to spend more money. The European Commission’s proposal did not adopt the proposal of establishing a “sovereign bankruptcy mechanism” proposed by Germany and supported by Slovakia and the Netherlands. This mechanism is designed to pressure member governments to save money and control budgets.
The European Union stipulates that the budget deficit of member states shall not exceed 3% of the gross domestic product (GDP), and France has repeatedly exceeded this limit in recent years. Macron proposed a grand EU reform blueprint in September 2017, hoping to use EU institutional reforms to revitalize the French economy, alleviate high unemployment and increase labor market mobility, but other EU countries have insufficient confidence in Macron's ability to promote domestic reforms.
The finance ministers of EU member states have been discussing the euro zone reform plan since November 2017, but they encountered an obvious obstacle: Germany is in a difficult post-election cabinet formation, and the Angela Merkel government has become a caretaker cabinet, making it difficult to make any major decisions. Whether they can continue to be the chief promoter of EU reform depends on whether Merkel's coalition party and the second largest party, the Social Democratic Party, can once again form a "major coalition" government.
Macron has high hopes for the "Grand Alliance" because the Social Democratic Party, which takes the center-left line, has always agreed to push European integration deeper. The Social Democratic Party Congress to be held from the 7th to the 9th will decide whether or not to formally initiate negotiations for the joint cabinet formation. Socialist Party leader Martin Schultz said on the 6th that the meeting will discuss how the Social Democratic Party "does everything possible" to make the German government economically respond to Macron's vision of EU reform.
He said: "France makes a proposal, but Germany does not want to participate. This is not possible."
"No one likes it, but no one dares to say"
On December 15, 2017, the European Union held the Euro Summit at its headquarters in Brussels, Belgium. The leaders of the meeting came from 19 Eurozone member states and 6 other EU countries that signed the 2012 EU Fiscal Agreement. The Czech Republic, which has not signed this agreement, and Croatia, which has not yet joined the Union when the agreement was signed, were invited to participate as observers.
EU officials said that the President of the European Council, Donald Tusk, is going to ask representatives of various countries to make suggestions on how to "strengthen the European Monetary Union" at the summit for the EU to make decisions in June 2018. On December 4, all EU member states, including the United Kingdom, will hold a summit, but the "highlight" will be the British "Brexit" agenda.
"The December summit did not make any major decisions," an EU source told AFP reporter. "No one likes the European Commission's reform package, but no one has the courage to say it."
"I can tell you in advance that the time for Germany to form a new government must be earlier than all member states reached a consensus on these reforms," said German Finance Minister Peter Altmeier.
Associate Professor Cass Mader of the School of Public and International Affairs at the University of Georgia said: "The strong German government continues to be absent, the UK's'Brexit' plan is still vague, and the Italian elections have been rolled out. In this case, the EU and the Eurozone It is destined to continue to live and live a mess."
"Even if Macron and Merkel are willing to work together to advance a more ambitious reform agenda, it will not be easy for them to convince their natural allies. For example, the leaders of Austria and the Netherlands like more nationalist proposals... (EU) We can only hope that the economic situation will improve, so that countries that are incompetent and refuse to reform will have less trouble."