The Eurogroup has started the year with hardly any concretions. However, France and Germany try to prevent the semester from ending up blank and finalize a new proposal to give another boost to the eurozone budget. The executives of Angela Merkel and Emmanuel Macron at the moment have agreed on a common position of several points, according to sources of the French Government.
Both cabinets agree to create an independent instrument that is nurtured by resources outside the EU Budget and governed by the Nineteen. The works, according to these sources, will be sent to the European Commission to “feed” the legislative proposal that should be prepared in the coming weeks.
The finance ministers of the eurozone have two folders on the table. But not minors. The first dossier was dragged from 2012 when the idea of creating a fund that guaranteed the deposits of all European taxpayers and that laid the foundations of the Banking Union was launched.
The second, the budget of the eurozone, has become the great workhorse of Macron, which wants to advance in its details before the European elections in May despite the enormous misgivings it raises among the countries of northern Europe, captained by Holland.
The French Finance Minister, Bruno Le Maire, met last night with his German counterpart, Olaf Scholz. On the agenda, among other issues, was the digital tax -which remains stuck in the Council of Ministers of the EU or the initiative of both executives for minimum taxation of companies. The other big issue was the budget of the eurozone.
Diplomatic sources avoided referring to him as a Franco-German proposal and explained that it is a document, which is not yet closed, that will be extended to other countries to feed the Commission’s proposal and the debate within the Eurogroup.
The two ministers had to iron yesterday several details. But sources of the French Government assured that there are already at least four points agreed. The proposal is to create an independent instrument financed with resources from the euro countries that come from outside the Multiannual Financial Framework (MFF).
And in spite of the misgivings that this provokes in the rest of the partners of the European Union, both countries think of a budget governed by the Nineteen. At the Euro Summit last December, the heads of state and government had agreed on some accounts anchored within the MFF and also open to countries that are in the foreground of the euro.
The ministers will also agree that this budget will finance reforms and investments within the framework of the European Semester, which sets the guidelines and recommendations to be followed by the countries of the EU. If the document stays there, it will leave the glass half empty again.
Or half full. France battled in the Eurogroup of December all morning so that the instrument collected an anti-crisis or stabilizing function, while Germany and Spain demanded that the possibility of including community unemployment insurance be opened. Holland refused both demands and the document finally picked up the agreement fund for convergence and competitiveness and disagreement which can stabilize economies in times of crisis and include unemployment insurance. That is a pact of minimums to continue negotiating later.
Community sources recalled that the December Summit gave a clear mandate to the European Commission to contribute to the debate of the Eurogroup, which implies that it could reintroduce this anti-crisis function explicitly. It is also possible to see what would be the role of the EU executive in an instrument designed to work independently of the EU accounts. In any case, according to Handelsblatt, last night, that budget had to be accommodated within the legal framework of the Union.
The Commissioner for Economic and Monetary Affairs, Pierre Moscovici, said yesterday in the European Parliament that until the end of its mandate has three priorities on the table: the completion of the Banking Union, the strengthening of the ESM and the creation of the budget of the euro area. And he recalled that a strong euro requires “far-reaching reforms” that promote the “convergence”, “stabilization” and “resilience” of the euro economies. The president of the Eurogroup, Mário Centeno, also called on the camera that this instrument is not only “cosmetic”.
The instrument is on the table of the Eurogroup despite the great reluctance of countries such as Holland or Finland. They accept a budget that favors the convergence and competitiveness of the members of the single currency, but not that they can be used to face economic crises.
The other mechanism, the deposit guarantee fund, advances with the work of two groups: one at a high level, which must set a roadmap for its implementation, and another that takes care of all the technical details. The latter is coordinated by Germany and Spain. The group will not only deal with the design of that fund but with a package of measures that will help reduce banking risks, the great German demand before putting this instrument into operation.