Tuesday

30th May 2023

Merkel challenger against banks tapping euro bailout fund

  • Peer Steinbrueck has the support of only 20 percent of Germans (Photo: Valentina Pop)

Peer Steinbrueck has had a bad year so far.

His popularity rates are less than a third of those of Chancellor Angela Merkel and his Social Democratic party is also trailing behind Merkel's Christian Democrats just 100 days before the September elections.

Read and decide

Join EUobserver today

Become an expert on Europe

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

... or subscribe as a group

Speaking to foreign journalists in Berlin on Thursday (13 June), Steinbrueck admitted that Merkel is more popular. But he said it was because she is giving Germans a false sense of security, while social disparities in the country are growing and its image abroad worsening.

Celebrated at home for looking after German taxpayer's money, Merkel's "uni-dimensional crisis management" based on austerity risks "killing the patient", as unemployment rates in southern European countries are at record highs, Steinbrueck said.

But the former finance minister in Merkel's grand coalition from 2005-2009 also realises German voters do not want to hear that a future chancellor wants to squander their money.

A year ago, Steinbrueck was advocating eurobonds as a way out of the crisis, but on Thursday the Social Democrat candidate compared mutualising debt in the eurozone with "giving my credit card to my teenage son."

"We never said eurobonds with no conditionality. Nobody would simply hand over their credit cards without any demands. And the demands may be difficult for some countries - including Germany - because they imply more sovereignty transfers to Brussels," Steinbrueck said.

He also said countries like Ireland should raise their corporate tax in order to prevent a "race to the bottom" among member states on giving multinational corporations ways to pay as little taxes as possible.

As for the €500 billion strong eurozone bailout fund (ESM) directly recapitalising banks in troubled countries, Steinbrueck noted that Merkel made such a promise last year, but that she will "drag out a decision as long as possible because it is not popular in Germany."

The ESM should stick to its initial mandate of helping out governments, not banks, Steinbrueck said.

"Banks should be bailed out by their shareholders, not taxpayers."

Eurogroup experts on Friday are set to gather in Rome for informal talks on the ESM recapitalisation plans, proposing a €60 billion cap on the scheme, Wall Street Journal reports.

But southern countries are frustrated with the slow pace of the talks and the prospect of a cap. Spain's foreign minister Manuel Garcia-Margallo on Wednesday said such a ceiling would make no sense and that the ESM should have "unlimited firepower" to be useful.

Merkel challenger urges more time for Greece

The centre-left's candidate to the German chancellery in 2013, ex-finance minister Peer Steinbrueck has criticised Merkel for not telling Germans the "truth" about Greece.

ESM bank bailouts will not happen soon, says Schaeuble

German finance minister Wolfgang Schaeuble Monday reiterated that no bank recapitalisation could take place until the EU's planned banking union is up and running but admitted "Spain can't wait that long".

MEPs to urge block on Hungary taking EU presidency in 2024

"This will be the first time a member state that is under the Article 7 procedure will take over the rotating presidency of the council," French Green MEP Gwendoline Delbos-Corfield, the key lawmaker on Hungary, warned.

European Parliament scales back luxury MEP pension fund

The European Parliament's Bureau, a political body composed of the president and its vice-presidents, decided to slash payouts from the fund by 50 percent, freeze automatic indexations, and increase the pension age from 65 to 67.

WhoisWho? Calls mount to bring back EU directory

NGOs and lobbyists slammed the EU commission for removing contact details of non-managerial staff from its public register, arguing that the institution is now less transparent.

Exclusive

MEP luxury pension held corporate assets in tax havens

While the European Parliament was demanding a clamp down on tax havens, many of its own MEPs were using their monthly office allowances to finance a luxury pension scheme that held corporate assets in the Cayman Islands, Bermuda and elsewhere.

Column

What a Spanish novelist can teach us about communality

In a world where cultural clashes and sectarianism seems to be on the increase, Spanish novelist Javier Cercas (b.1962) takes the opposite approach. He cherishes both life in the big city and in the countryside.

Opinion

Poland and Hungary's ugly divorce over Ukraine

What started in 2015 as a 'friends-with-benefits' relationship between Viktor Orbán and Jarosław Kaczyński, for Hungary and Poland, is ending in disgust and enmity — which will not be overcome until both leaders leave.

Latest News

  1. EU clashes over protection of workers exposed to asbestos
  2. EU to blacklist nine Russians over jailing of dissident
  3. Russia-Ukraine relations the Year After the war
  4. Why creating a new legal class of 'climate refugees' is a bad idea
  5. Equatorial Guinea: a 'tough nut' for the EU
  6. New EU ethics body and Moldova conference This WEEK
  7. How the EU's money for waste went to waste in Lebanon
  8. EU criminal complicity in Libya needs recognition, says expert

Stakeholders' Highlights

  1. International Sustainable Finance CentreJoin CEE Sustainable Finance Summit, 15 – 19 May 2023, high-level event for finance & business
  2. ICLEISeven actionable measures to make food procurement in Europe more sustainable
  3. World BankWorld Bank Report Highlights Role of Human Development for a Successful Green Transition in Europe
  4. Nordic Council of MinistersNordic summit to step up the fight against food loss and waste
  5. Nordic Council of MinistersThink-tank: Strengthen co-operation around tech giants’ influence in the Nordics
  6. EFBWWEFBWW calls for the EC to stop exploitation in subcontracting chains

Join EUobserver

Support quality EU news

Join us