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France and Germany dither over the eurozone’s future

Euro & Finance

France and Germany dither over the eurozone’s future

Angela Merkel and François Hollande

[President of the European Council]

France and Germany hope to present a common position on the closer integration of the eurozone by the end of the year. But ahead of today’s (7 April) French-German Council, little progress has been made. EurActiv France reports.

The series of crises that hit the EU in 2015, along with the looming spectre of the Brexit referendum, ensured the French-German eurozone project was not a high priority.

The leaders of both countries, each accompanied by an entourage of ministers, will meet in Metz, France,  on Thursday for the 18th French-German Ministerial Council.

Among the subjects scheduled for discussion at the annual meeting are the two countries’ common proposals on the future of eurozone integration. Angela Merkel and François Hollande had promised a common position on the issue by the end of 2016.

Hollande and Merkel join forces to push for eurozone integration

Motivated by the urgent need for reform, the French and German heads of state will put aside their deep political differences and champion eurozone reform together. EurActiv France reports.

“Eurozone integration must be continued. Today there is a real will from both France and Germany to produce new institutional proposals to allow for closer integration,” a source close to the French presidency told EurActiv.

Last May, the two leaders published a joint proposal on strengthening the eurozone without changing the treaties.

In this paper, the eurozone’s two largest economies called for the establishment of a structured system of eurozone governance through the organisation of dedicated summits, as well as fiscal and social convergence.

French, German ministers flesh out plans for ‘two-speed Europe’

Emmanuel Macron and Sigmar Garbriel have called for greater fiscal and social harmonisation in the eurozone, saying other EU countries like Britain should be allowed to settle for a less integrated Union based on the single market.

The delicate question of altering the treaties to further shore up the eurozone was put off until 2016. But in spite of the consensus over the need to better integrate the Economic and Monetary Union, the subject has advanced little in the last year.

British obstructions

One reason behind this slow progress is the uncooperative behaviour of the United Kingdom. Eurozone integration is one of the UK’s pet peeves.

London fears that closer integration of governance in the single currency area would push it even further from the centre of decision-making in the EU.

After the Brexit referendum, scheduled for 23 June this year, France and Germany will have the freedom to proceed without fear of backlash from across the channel.

“The choice of the British people will have an impact on the future of the EU and the eurozone, even if they decide to stay,” the French source said.

Juncker paper fails to spark debate about eurozone’s future

National politicians have remained largely indifferent to a recent “analytical note” by the European Commission aimed at launching a debate over the future of the eurozone. EU leaders seem to be keeping their powder dry until the EU summit in June, when a second paper is expected. The EurActiv network reports.

But aside from the economic impact of the UK’s possible exit from the EU, a Brexit would also remove the main obstacle to a strong, integrated eurozone.

“The eurozone has never completed its integration process. It should look forward to becoming the heart of the European Union,” a source told EurActiv.

Multiple crises

The number of crises that have beset the EU in the last year have left very little time for either Merkel or Hollande to prioritise these subjects.

Some time at the French-German Council will be taken up by the question of the refugee crisis, but also with security and the fight against terrorism.

The EU’s economic situation, notably in relation to growth and jobs, will also be debated, and the two countries’ finance ministers will discuss the recent revelations of tax evasion brought to light by the Panama Papers.

Merkel and Hollande devise a plan for the future of the eurozone

The two leaders are expected to unveil a joint proposal on the future of the eurozone by the end of 2016, once they have set aside their own differences over how to pursue integration. EurActiv France reports

“A lot of urgent issues have occupied Angela Merkel and François Hollande in recent months,” a source said.


Yet the common position has not just fallen victim to a lack of time, but also to disagreements between the two countries over the fundamental aspects of the project.

The question of establishing a specific budget for the eurozone is still an open debate. “The proposals are not yet ready, they need time to mature,” the source said.

German, French central bankers call for eurozone finance ministry

The eurozone needs to press ahead with structural reforms and closer integration, including a eurozone finance ministry, to deliver sustainable growth, the heads of the French and German central banks wrote in a German newspaper on Monday (8 February).

Hollande has made regular calls for the creation of a separate eurozone budget and eurozone parliament, while Merkel has been more reserved on the subject.

Among the few subjects the two countries have agreed on so far is the idea that the president of the Eurogroup should be the eurozone’s external representative.

This is largely down to the fact that France and Germany are the only two eurozone countries to already have their own seat at the IMF.


At the eurozone summit of 24 October 2014, the presidents of the European Commission, the Council, the Eurogroup, the European Parliament and the European Central Bank were invited to combine their efforts to prepare the "next steps for a better economic governance in the euro area".

This mandate was confirmed at the European Council of 18 December 2014. The first stage of this collaboration was for the five presidents to draft a document that would serve as the basis for a discussion at the European Council meeting in February 2015.


  • 7 April 2016: French-German Ministerial Council, Metz