The German government still wants to set up a European monetary fund but the European Commission does not want to surrender any responsibility for assessing eurozone finances. EURACTIV’s partner Der Tagesspiegel reports.
A dispute continues to brew about the European Stability Mechanism (ESM), from which billions of euros are flowing into the third Greek bailout programme.
German Chancellor Angela Merkel and her finance minister, Wolfgang Schäuble, (both CDU) want to upgrade and model the Luxembourg-based rescue fund after the International Monetary Fund (IMF), creating its own ‘European Monetary Fund’.
Merkel and Schäuble want this ‘EMF’ to be able to monitor the finances of all the eurozone countries. But EU Tax Commissioner Pierre Moscovici is against the idea. The reason: monitoring eurozone budgets is a competence of the Commission.
Yesterday (7 March), Moscovici was in Berlin and he met with, among others, Schäuble’s deputy, Jens Spahn, and German MP Ralph Brinkhaus (both CDU).
It is likely that the French Commissioner will continue to push for institutional involvement in the plan. Moscovici has previously insisted that a European monetary fund should “not be a totally technocratic body”.
In the past, the Commission has made its assessment of eurozone budgetary policies using political leniency, as demonstrated by the executive’s granting of a reprieve to Italy and France in 2015. It has sometimes been too lenient for Berlin’s taste.
Merkel and Schäuble’s favoured option of expanding the current bailout fund into a full-blown institution that rates the finances of the 19 eurozone countries would be a significant step forward in the development of the EU, in the German government’s view.
What the future of the EU will actually look like after Brexit will be addressed, at the latest, after the upcoming election in Germany (in September).
Merkel has already indicated that she favours the multi-speed EU option. If this scenario is pursued, it could mean that the eurozone countries band together more closely in the future.
At a summit of the ‘big four’ of France, Germany, Italy and Spain on Monday (6 March) the four biggest European economies backed a differentiated model of EU integration.
But German Green MEP Sven Giegold fears that expanding the ESM into a European monetary fund would bypass the European Parliament and the Commission.
Giegold also warned that Berlin is “undermining the EU institutions” at the European Council and criticised former Parliament President and Merkel’s main rival Martin Schulz (SPD) for remaining silent on the issue.
But German government officials believe that setting up the ‘EMF’ would provide an instrument that could alleviate future turbulence in the eurozone. After Greece’s current aid programme ends, there are fears that the embattled country will need a fourth bailout package, probably without the involvement of the IMF.