Saturday

24th Aug 2019

Merkel and Hollande to 'let off steam' at EU summit

EU leaders gathering in Brussels on Wednesday (23 May) evening for an informal summit on how to invigorate the economy are likely to see a sharp exchange of views between France's new President and the German Chancellor on the subject of eurobonds.

France's Francois Hollande in recent days has received broad international support for his ideas on economic stimulus - ranging from US President Barack Obama to the International Monetary Fund (IMF) and the Organisation for Economic Co-operation and Development (OECD), which on Tuesday warned the euro-crisis is the "greatest threat" to the world economy unless leaders get their act together.

Read and decide

Join EUobserver today

Support quality EU news

Get instant access to all articles — and 18 year's of archives. 30 days free trial.

... or join as a group

But on the issue of common eurozone guarantees for debt - eurobonds - Germany has dug in its heels, with officials from Angela Merkel's entourage on Tuesday saying this is the "wrong way" to go and that Berlin will not change its mind in the coming month.

"Eurobonds are a controversial subject among several delegations. If it's put on the table, I would expect quite some reactions," one senior EU official told journalists in Brussels on Tuesday.

Another EU diplomat told this website that the summit - an informal dinner with no official decisions planned - will be a "good opportunity" for Merkel and Hollande to "let off steam and see face-to-face where each [of them] stands."

Germany's line is that by mutualising debt, richer and more disciplined countries would have to pay for profligate euro colleagues, leading to a future repetition of the Greek scenario in which a southern country joined the euro and was able to borrow at low interest rates without putting its finances in order.

Austria, Finland and the Netherlands support Germany's thinking.

But the German camp is becoming increasingly isolated, with even former hawkish institutions such as the IMF or the OECD now calling for more lax fiscal policies and growth-stimulating measures to prevent the euro-crisis from damaging the global economy.

Summit organisers expect long discussions over dinner "to take a common approach on what one or another is saying." Talks are likely to drag on, as Greece will be the last topic on the agenda.

The summit is also about "reminding leaders that their ... ministers should implement what is being decided here," the EU official said.

In recent months, national bickering has seen two potential anti-crisis measures - on a common EU patent and on helping catch Swiss-bank-using tax evaders - fall by the wayside.

Meanwhile, leaders are likely to endorse an earlier agreement by their ambassadors and the European Parliament on so-called project bonds - a financing scheme for 2012 and 2013 worth €230 million for various infrastructure projects.

One EU diplomat poured cold water on the scheme, however.

"It is not money we are lacking, it is projects. Greece has all the funding it needs. But there simply are not enough good projects to be financed," the contact said.

Rehn backs 'smart' mutual debt fund

The idea of mutualising eurozone debt remains as controversial as ever but economic affairs commissioner Olli Rehn has spoken out in favour of a halfway house solution.

French president bemused by lengthy EU summit

At his first ever EU summit, French President Hollande scored a victory of sorts by managing to get eurobonds - previously a taboo topic - discussed around the table. Meanwhile, he seemed bemused by the length of the meeting.

Exclusive

Brexit row delays financial products transparency review

A European financial regulatory body set up after the financial crisis is at loggerheads with the European Commission over whether to carry out a transparency review of certain financial products. The reason: Brexit.

Commission defends Mercosur trade deal

EU commissioners defended a far-reaching free trade agreement between the EU and four Latin American countries, against critics who fear it will damage European farmers' livelihoods and the global environment.

EU hesitates to back France over US tariff threat

France has passed a new tax on tech companies that will affect US global giants like Facebook. Donald Trump has threatened retaliatory tariffs over it. The EU commission says it will "coordinate closely with French" on the next steps.

News in Brief

  1. Ocean Viking to disembark in Malta after ordeal
  2. Germany joins France in world outcry on Brazil fires
  3. British people lose faith in Brexit deal
  4. Brexit hardliners want further changes to EU deal
  5. German manufacturers confirm fear of recession
  6. Belgian socialists and liberals scrap over EU post
  7. Fall in EU migration leading to UK skills shortages
  8. Switzerland makes post-Brexit flight preparations

Opinion

Why von der Leyen must put rights at core of business

Ursula von der Leyen's in-tray must include those European executives on trial for systematic workplace harassment, the break-up of European slavery rings, and allegations of European companies' abuse in palm oil, including child labour, land grabs, and deforestation.

Stakeholders' Highlights

  1. UNESDAUNESDA reduces added sugars 11.9% between 2015-2017
  2. International Partnership for Human RightsEU-Uzbekistan Human Rights Dialogue: EU to raise key fundamental rights issues
  3. Nordic Council of MinistersNo evidence that social media are harmful to young people
  4. Nordic Council of MinistersCanada to host the joint Nordic cultural initiative 2021
  5. Vote for the EU Sutainable Energy AwardsCast your vote for your favourite EUSEW Award finalist. You choose the winner of 2019 Citizen’s Award.
  6. Nordic Council of MinistersEducation gets refugees into work
  7. Counter BalanceSign the petition to help reform the EU’s Bank
  8. UNICEFChild rights organisations encourage candidates for EU elections to become Child Rights Champions
  9. UNESDAUNESDA Outlines 2019-2024 Aspirations: Sustainability, Responsibility, Competitiveness
  10. Counter BalanceRecord citizens’ input to EU bank’s consultation calls on EIB to abandon fossil fuels
  11. International Partnership for Human RightsAnnual EU-Turkmenistan Human Rights Dialogue takes place in Ashgabat
  12. Nordic Council of MinistersNew campaign: spot, capture and share Traces of North

Latest News

  1. Spain heading for yet another general election
  2. EU to discuss Brazil beef ban over Amazon fires
  3. 'Our house is burning,' Macron says on Amazon fires
  4. What happens when trafficking survivors get home
  5. EU states and Russia clash on truth of WW2 pact
  6. EU considers new rules on facial recognition
  7. EU to pledge Africa security funds at G7 summit
  8. Letter from the EESC on per diem article

Join EUobserver

Support quality EU news

Join us