Not all Macron’s EU reforms possible, German finance minister says

German Chancellor Angela Merkel (R) gestures next to German Finance Minister Olaf Scholz (L) during the beginning of a cabinet meeting at the Meseberg palace in Gransee, Germany, 11 April 2018. [EPA-EFE/CLEMENS BILAN]

German Finance Minister Olaf Scholz said EU reforms proposed by French President Emmanuel Macron should be addressed before European elections next year, but added that some of the proposals were not feasible.

Scholz told the Frankfurter Allgemeine Sonntagszeitung newspaper Germany would work closely with France over the coming months to assess which reforms should be advanced.

France has been pressing Germany and other European countries to stop holding up tough decisions about the euro zone’s banking and capital market regulations.

Eurozone leaders pledge to conclude banking union by June

Friday’s eurozone summit ended with an agreement to finalise the banking union by June, but the future of the fiscal union remains unclear as leaders remained divided.

Oettinger critical

EU Commissioner Günther Oettinger also criticised Berlin on Saturday for dragging its feet on Macron’s proposals and said initial decisions should be made at the EU summit in June.

“Macron deserves quicker answers from Germany,” he told the same newspaper in a separate interview.

Scholz agreed that the issue needed to be addressed.

“We will examine what is possible without overloading the ability of individual members to act,” he said in the interview, to be published on Sunday.

Scholz’s comments come days before Macron is due to visit Berlin to meet Chancellor Angela Merkel.

Scholz said it was clear that Germany would have to increase its funding of the European Union after Britain leaves the bloc.

But he said Germany would not cover the resulting financial gap on its own, echoing comments by his predecessor, conservative hardliner Wolfgang Schaeuble.

“A German finance minister stays a German finance minister. And I will put on my most miserly face,” he said.

Europe’s reform push faces reality check

The impulse to bolster the eurozone, sparked by Emmanuel Macron’s victory in France almost one year ago, is losing its vigour as political instability persists and a group of countries have solidified their opposition to bold changes.

Expanding the ESM

Regarding reforms proposed by Macron, he said Germany wanted to expand the European Stability Mechanism into a monetary union while also ensuring continued parliamentary control.

He said there were “hard nuts to crack” with regard to a proposed banking union, including the high level of non-performing loans in some countries.

Asked about Macron’s proposal for a European budget and a European finance minister, Scholz said: “These ideas are bringing new momentum into the European project that we need. But the French president also knows that not all of his ideas can be realised.”

Merkel is due to discuss the EU reforms with senior members of her conservative bloc in parliament on Monday after Ralph Brinkhaus, deputy leader of the conservative parliamentary group, raised serious concerns about the eurozone reform drive.

Oettinger, who is also a conservative, said those comments threatened to derail the reform efforts and were “not acceptable.”

Eight northern EU states urge caution in eurozone reforms

Eight northern European countries said today (6 March) that euro zone reforms should focus on completing the banking union, improving compliance with budget rules and setting up a European Monetary Fund, with more ambitious plans left for later.

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