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03/12/2016

Berlin opposes Moscovici for economic affairs post

EU Elections 2014

Berlin opposes Moscovici for economic affairs post

Former French Finance Minister Pierre Moscovici. [The Council of the European Union]

German media reports that Berlin will strongly oppose a French Socialist taking over the Economic and Monetary Affairs portfolio in Jean-Claude Juncker’s new European Commission. EurActiv Germany reports.

The German government is determined not to let Pierre Moscovici become EU Commissioner of Economic and Monetary Affairs, the Süddeutsche Zeitung reported, quoting sources close to negotiations in Berlin and Brussels.

The newspaper wrote the German government made it clear that it is keeping a close eye on the allocation of the EU’s most important economic policy position.

The path mapped out towards balancing the budget should continue, the sources said. Berlin views the Commissioner post for economic and monetary affairs as “very significant”, the sources indicated, saying it must therefore be “wisely” filled. France’s former Finance Minister, who has been selected for preliminary talks, only partially fulfills the conditions, government sources said.

A few days ago, ongoing controversy over France’s economy and budgetary policy flared again when the country’s Socialist President François Hollande replaced his leftist economy minister with a former Rothschild partner.

France is still stuck in a difficult economic crisis and is currently undergoing strict EU reforms to get its budget back in order. Earlier this week, a heated discussion took place in the EU capital over austerity and reform policy, with urges for France to stick to structural reforms.

>>Read: Commission tells France to urgently speed up reforms

In mid-July, German Finance Minister Wolfgang Schäuble was one of the first to voice criticism of France’s claim to the monetary affairs post.

The deadline for France to get its public deficit under 3% of GDP has already been extended twice, Schäuble said at an event in Freiburg’s Centre for European Policy (CEP).

The Commissioner for Economic and Monetary Affairs oversees compliance with the Stability Pact in the European Commission, the centre-right politician explained.

Whether or not France “of all countries” in its current state should be allocated this post “is for smarter people than myself to decide”, said Schäuble.

Shortly thereafter, Schäuble released statements saying he had doubts over appointing Moscovici.

He said he was simply referring to the message that might be conveyed, if a French candidate were appointed to this position in the current situation.

“The smart individuals who get to decide must consider this in their decision,” he said, adding that the statement “was not a direct reference to Mr. Moscovici”.

At a special EU-Summit this Saturday (30 August), EU leaders are expected to fill two top jobs: EU High Representative and President of the European Council. The two choices could affect the organisation of the new European Commission by its President Jean-Claude Juncker.

The Süddeutsche wrote that its sources seemed certain the German government would handover both positions to the Socialists and Social Democrats if the two give up their claim to the Commission’s economic affairs portfolio.

Background

With an annual deficit of 4.1% of GDP in 2013, France has exceeded the 3% budgetary limits enshrined in the EU treaties.

The European Commission launched measures to deal with excessive deficit and gave France an extra two years to reduce its public deficit to 3%.

In exchange, France was expected to table structural reform plans to reduce their deficits in the long term.

>>Read: Barroso urges ‘credible reforms’ in France in return for deficit grace period

France, whose economy barely grew over the last two years, is an example of the difficulty facing many governments, implementing unpopular structural reforms of pensions or labour laws and keeping a tight rein on public spending.

The Commission believes t it will be necessary to reform the labour market and pensions in order to "unlock the growth that France so badly needs.”

It also expects France to open up its electricity and rail markets, which are currently dominated by former state monopolies EDF and SNCF, the energy and rail companies.

>> Read: Brussels tells France, Italy to keep budget promises