10th Aug 2020

Germany sets tone for 'controversial' summit

  • Angela Merkel is 'under no illusion' about the summit ahead (Photo:

On the eve of what she expects to be a "controversial" summit, German Chancellor Angela Merkel has challenged other member states on whether they are ready to relinquish yet more budgetary oversight to Brussels - Berlin's sine qua non for future debt sharing.

She said in a speech on Wednesday (27 June) that a eurozone integration blueprint circulated on Monday got the balance wrong between budgetary control and shared liability.

Read and decide

Join EUobserver today

Support quality EU news

Get instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

The paper, put together by European Council President Herman Van Rompuy, gives "priority" to mutualising debt and puts "more controls and legal obligations" in second place and then only "very imprecisely."

"Accountability and control clearly stand in disproportion in this report," said the Chancellor.

Eurobonds - mentioned in the summit paper as a medium-term objective - would not only go against the German constitution but are also "economically wrong and counterproductive."

What is needed is more EU powers to step in when national budgets get out of line, she noted.

"I will sound out whether other member states are prepared to take this path - including necessary treaty change," she said.

The German leader's tough words set the scene for what is likely to be a bruising summit beginning Thursday.

The extra supervisory powers that Merkel is calling for chip away at what is the heart of a state's powers - the right to decide how and when to spend money.

Berlin has been increasingly grumbling about other capitals calling on Germany to open its pockets but being unprepared to accept greater external controls.

A key issue is relations with France. Merkel will meet President Francois Hollande in Paris on Wednesday evening. Hollande has been pressing Germany to show more solidarity before Paris will accept a loss of sovereignty - traditionally a hard-sell among Hollande's own socialists.

Meanwhile, Spain and particularly too-big-to-fail Italy are the other two main players in the eurozone game.

While Merkel is focussing on long term structural change to the eurozone, Madrid and Rome are looking for quick solutions as their borrowing costs have jumped upwards.

One of the ideas pushed by Italian leader Mario Monti - who says he is prepared to sweat out a days-long summit to get a satisfactory outcome - is that the eurozone rescue fund buy the bonds of troubled but well-intentioned eurozone countries to lower borrowing costs.

Another mooted plan is to have the eurozone fund directly recapitalise troubled banks - rather than going via the government and pushing a state further into debt - something particularly relevant to Spain.

"I have no illusions. I am expecting controversial discussions in Brussels," said the Chancellor of the summit, adding that "many eyes" will be on Germany.

Merkel under pressure to move on Spain and Italy

With borrowing costs in Spain and Italy at unprecedented highs, Germany's Angela Merkel came under pressure at the G20 summit to let eurozone bail-out funds help them out.

Top EU officials urge MEPs give quick budget-deal approval

MEPs criticised the EU deal on the budget and recovery package clinched by leaders after five days of gruelling talks, saying it is not enough "future-oriented", and cuts too deeply into EU policies, including health, innovation, defence and humanitarian aid

EU Parliament gears up for fight on budget deal

European parliament president David Sassoli said certain corrections will have to be made in the budget, citing research and the Erasmus program for students, calling the cuts "unjustified".

EU leaders agree corona recovery after epic summit

After gruelling five-day talks, EU leaders agreed on €390bn in grants and €360bn in low-interest loans to hardest-hit member states - after much opposition from the Dutch-led 'frugal' bloc of countries.

News in Brief

  1. Germany breached rights of Madeleine McCann suspect
  2. EU offers trade perks to Lebanon
  3. Germany charges ex-Audi chiefs on emissions cheating
  4. UK quarantines Belgium, as European infections climb
  5. Bulgaria's Borissov mulls resignation
  6. EU prolongs anti-dumping duties on Chinese steel
  7. Swedish economy contracted less during April to June
  8. EU offers help to Lebanon after port explosion

EU forecasts deeper recession, amid recovery funds row

The economies of France, Italy and Spain will contract more then 10-percent this year, according to the latest forecast by the EU executive, as it urges member state governments to strike a deal on the budget and recovery package.

Stakeholders' Highlights

  1. UNESDANext generation Europe should be green and circular
  2. Nordic Council of MinistersNEW REPORT: Eight in ten people are concerned about climate change
  3. UNESDAHow reducing sugar and calories in soft drinks makes the healthier choice the easy choice
  4. Nordic Council of MinistersGreen energy to power Nordic start after Covid-19
  5. European Sustainable Energy WeekThis year’s EU Sustainable Energy Week (EUSEW) will be held digitally!
  6. Nordic Council of MinistersNordic states are fighting to protect gender equality during corona crisis

Latest News

  1. EU wary of violence in Belarus election
  2. Iraqis paid €2,000 each agree to leave Greece
  3. EU's most sustainable islands are Danish 'Sunshine Islands'
  4. Worrying rows over future EU chemicals policy
  5. Rainbow flag protesters charged by Polish police
  6. An open letter to the EPP on end of Hungary's press freedom
  7. Renew Europe has a plan to combat gender-violence
  8. Why EU beats US on green pandemic recovery

Join EUobserver

Support quality EU news

Join us