‘Differences’ persist on eurozone budget ahead of key EU summit

President of the Eurogroup, Portuguese Finance Minister Mario Centeno speaks to the press during the Eurogroup Finance Ministers' meeting in Brussels, Belgium, 12 March 2018. [Olivier Hoslet/EPA/EFE]

Eurogroup head Mário Centeno warned Monday (25 June) of differing opinions towards a plan by France and Germany to establish a eurozone budget, ahead of a key EU summit to discuss the matter.

“Differences of views remain on the need for and the possible features of a eurozone budget”, Centeno, who is also Portugal’s finance minister, wrote in a letter to EU President Donald Tusk to prepare the top-level talks on reforming the eurozone.

Still, Centeno said that “subject to guidance from leaders” the Eurogroup, a grouping of the 19 finance ministers from countries using the single currency, was open to discussing the budget idea further.

The careful wording came amid a campaign by Dutch Finance Minister Wopke Hoekstra to thwart the eurozone budget idea, a major reform plan from French President Emmanuel Macron that last week won the cautious backing of German Chancellor Angela Merkel.

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.

Macron has made the idea of a crisis-fighting budget for the 19-member single currency bloc a signature part of his vision to jump-start the EU after the debt crisis, the shock of Brexit and the rise of populists.

The eurozone budget is part of a package of reforms to be discussed by the EU leaders on the second day of two-day summit that will be dominated by the migration question and the UK’s divorce from the bloc.

The idea of a joint budget, which Merkel initially resisted, is specifically part of an effort to bring about economic convergence in the eurozone.

The absence of such convergence in the single currency area has been seen as one of the root causes of the debt crises in Greece, Spain and Ireland.

Less controversial reforms targeted by Berlin and Paris include expanding the remit of the European Stability Mechanism ESM) — the firefighter for eurozone countries with serious debt problems.

Plans to harmonise corporate taxes in the bloc and introduce a digital tax by the end of 2018 are also on the table.

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