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Merkel's Bavarian ally opposes Macron's euro zone reform plans: Der Spiegel
July 22, 2017 / 2:53 PM / 4 months ago

Merkel's Bavarian ally opposes Macron's euro zone reform plans: Der Spiegel

BERLIN (Reuters) - A senior member of German Chancellor Angela Merkel’s Bavarian allies rejected French President Emmanuel Macron’s plans to reform the euro zone by installing a joint finance minister and creating a common budget, in an interview published on Saturday.

Bavarian Finance Minister Markus Soeder (CSU) arrives in the Bavarian state parliament in Munich July 17, 2012. REUTERS/Michaela Rehle

The suggestions from Macron, who was elected in May, have been met with caution by Merkel, amid suspicion in Berlin that German taxpayers might be left to shoulder common debts.

Markus Soeder, Bavaria’s finance minister and a senior member of the Christian Social Union (CSU) - the region’s sister party to Merkel’s Christian Democrats (CDU) - told Der Spiegel magazine that Germany needed to consider how it could, together with France, strengthen financial stability in Europe.

But he raised doubts about the idea of a euro zone finance minister, saying he was “very skeptical about whether an extra political office alone would improve the objectivity of decisions”.

Soeder said a joint finance minister who might get the right to intervene in the budgets of euro zone states if they did not stick to stability criteria would amount to a “huge intrusion”.

He was also concerned that changing EU treaties “would create new European financial equalization or a transfer model through the back door”.

Soeder suggested taking the responsibility for ensuring states stick to the stability criteria out of the European Commission’s remit and passing it to a beefed-up European Stability Mechanism (ESM), in the form of a European Monetary Fund with wide-ranging powers.

The European Monetary Fund would have the power to punish states that do not stick to the European stability pact - which stipulates, for example, that member states should not run budget deficits greater than 3 percent of GDP - and would be more objective in checking whether states are keeping to the criteria, Soeder said.

German Finance Minister Wolfgang Schaeuble has proposed turning the euro zone’s ESM rescue fund into a European monetary fund.

Asked about Macron’s idea for a common euro zone budget, Soeder said it was good to promote investment in Europe but “we don’t want any eurobonds or an EU financial transfer system. And no one should believe that a European finance minister will give them the money that their own budget lacks”.

Reporting by Michelle Martin; Editing by Mark Trevelyan

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