EU leaders downgrade the expectation of a rapid and comprehensive reform of the euro

EU leaders downgrade the expectation of a rapid and comprehensive reform of the euro

The leaders of the European Union, which today held a summit on the euro without the United Kingdom, cooled expectations of undertaking in the short term the profound reform of the eurozone by which the EU institutions claim and some countries, in particular, France.

The Heads of State and Government debated for the first time today the proposals to strengthen the eurozone, the majority put on the table by a European Commission whose desire to deepen economic integration shares the French president, Emmanuel Macron.

The discussion, from which concrete decisions were not expected, has only generated agreement to give priority to the less controversial initiatives and a calendar that sets March 2018 for a new euro summit, and June to agree on a road map with the steps for the next five or ten years.

Also to show that the divisions that the crisis has forged between the so-called hawks of fiscal discipline, such as Germany, the Netherlands or the Baltics, and the defenders of greater integration, such as France, Italy and other countries of the South, have not disappeared. end of the recession.

“The leaders agreed on my proposal that in the next six months the work of our finance ministers should focus on areas where there is more consensus,” European Council President Donald Tusk told a news conference.

The partners, he said, should move “step by step” to complete the banking union and transform the European Stability Mechanism – the eurozone rescue fund – into a European Monetary Fund, which would have greater powers in future financial assistance programs. .

To complete the banking union, it is necessary to implement the European Deposit Guarantee System and the firewall of the Single Resolution Fund.

“Discussions will continue on other ideas that need more time to mature and a longer perspective,” Tusk said.

"Discussions will continue on other ideas that need more time to mature and a longer perspective," Tusk said.

Among these initiatives with less consensus are the creation of a fiscal capacity to stabilize the eurozone in cases of crisis that hit a single country, a function for which France proposed a budget of the euro zone that has not reaped sympathy.

Also the simplification of the fiscal discipline rules or the creation of a Minister of Economy for the Union, raised by Brussels.

Tusk noted that June 2018 “could be the time to take the first decisions”, without specifying what the ambition of a “road map” that could be from a mere declaration of intentions to a proposal of concrete measures depending on two factors: the consensus that is achieved and the formation of Government in Germany.

“The objective is to be able to converge in the month of March because at that time a political stage will have passed in Germany,” Macron said at a press conference with German Chancellor Angela Merkel, who acknowledged that the stability and strength of Germany are essential to advance.

According to the French, the March meeting will be a first “strategic and political” discussion for the EU to define how it sees the eurozone in the next decade and in June they can translate measures “in the short, medium and long term”.

Merkel assured that when there is this “convergence” they will find a “common solution” and pointed out that with the return of growth and employment “it is time to carry out structural reforms and promote more the Economic and Monetary Union”.

However, Berlin has been the main opponent of the actions to complete the banking union, in particular the European Deposit Guarantee System, for its refusal to share banking risks that it considers still excessive.

The Dutch Prime Minister, Mark Rutte, warned that countries should make internal reforms before tackling other initiatives and noted that “it does not make sense to talk about proposals if you do not agree on the objective.”

On the contrary, the president of the European Central Bank, Mario Draghi, defended that for the current economic expansion to be “sustainable” the countries have to make internal reforms, but also the structure of the eurozone in the face of the “new challenges” that may arise

The president of the European Commission, Jean-Claude Juncker, gave a touch of attention to Germany and company and, without mentioning, encouraged them to “look at the figures” to check the improvement in capital levels and the reduction of bad loans .