Wednesday

6th Jul 2022

IMF urges Germany to show eurozone vision

  • German Chancellor Angela Merkel is saying as little as possible about the eurozone ahead of September elections (Photo: Felix O)

The International Monetary Fund Tuesday (6 August) urged Germany to play more of a leading role in laying out a vision for the eurozone.

“Germany plays a pivotal role in the development of policies and the evolving architecture of the European monetary union,” said the IMF's mission chief for Germany, Subir Lall, to mark the publication of the organisation's annual report on the country.

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

The assessment said that "clearly articulating the shared vision for closer economic and financial integration among euro area" would give a "crucial anchor" for the expectations of households, businesses and financial markets.

Reducing policy uncertainty would aid not only the eurozone but Germany as well, with the country's businesses adopting a "wait and see" attitude as they wait for more clarity on the euro area.

"Despite strong fundamentals, heightened uncertainty about the euro area - more so than about Germany itself - is holding back more robust growth in Germany," the IMF said.

It also urged Europe's largest economy to avoid unnecessary fiscal consolidation and predicted "weak economic activity in 2013" with the economy expected to expand only by 0.3 percent.

Germany's priorities, said the IMF, include strengthening its banking system and "sustaining financial reform" at both the domestic and regional level.

The IMF's prodding about Germany's eurozone-level role comes as the country is increasingly focused on federal elections on 22 September.

The upcoming poll has seen Chancellor Angela Merkel - expected to be comfortably re-elected - avoid all controversial policy debates, including on establishing a banking union and possible debt relief for Greece.

The pre-election mode comes on top of years of cautiousness by Merkel when it comes to the eurozone.

Thrust into de facto EU leadership due to Germany's relative economic strength, Merkel has often frustrated her euro counterparts with her decision-making style and her focus on fiscal consolidation.

This has now featured in domestic political campaigning.

Socialist challenger Peer Steinbrueck said that Merkel's dispassionate approach to the EU is due to her growing up in communist East Germany.

In remarks made at a debate organised by Tagespeigel on Sunday, Steinbrueck suggested that her roots meant she was more distant from the ''European project" than politicians from West Germany.

"The fact that she until 1989/1990 had a very different personal and political socialisation than those who experienced European integration since the early 1950s... in my eyes plays a role," he said.

Despite adding the qualifier that Merkel could not help where she grew up, Steinbrueck's comments have been strongly criticized by other politicians for condemning people who grew in communist countries as not being able to empathise with the point of the EU.

Rising prices expose lack of coherent EU response

The increasingly sharp debate over the rising cost of living exploded in European Parliament, with lawmakers from all stripes, liberal, left, green and conservative, calling on the EU to act.

News in Brief

  1. France to nationalise nuclear operator amid energy crisis
  2. Instant legal challenge after ok for 'green' gas and nuclear
  3. Alleged Copenhagen shooter tried calling helpline
  4. Socialist leader urges Czech PM to ratify Istanbul convention
  5. Scottish law chief casts doubt on referendum
  6. British PM faces mounting rebellion
  7. Russian military base near Finnish border emptied
  8. Euro slides to lowest level in two decades

Stakeholders' Highlights

  1. Nordic Council of MinistersNordic and Canadian ministers join forces to combat harmful content online
  2. Nordic Council of MinistersNordic ministers write to EU about new food labelling
  3. Nordic Council of MinistersEmerging journalists from the Nordics and Canada report the facts of the climate crisis
  4. Council of the EUEU: new rules on corporate sustainability reporting
  5. Nordic Council of MinistersNordic ministers for culture: Protect Ukraine’s cultural heritage!
  6. Reuters InstituteDigital News Report 2022

Latest News

  1. Legal action looms after MEPs back 'green' nuclear and gas
  2. EU readies for 'complete Russian gas cut-off', von der Leyen says
  3. Rising prices expose lack of coherent EU response
  4. Keeping gas as 'green' in taxonomy vote only helps Russia
  5. 'War on Women' needs forceful response, not glib statements
  6. Greece defends disputed media and migration track record
  7. MEPs adopt new digital 'rule book', amid surveillance doubts
  8. 'World is watching', as MEPs vote on green finance rules

Join EUobserver

Support quality EU news

Join us