Saturday

25th Feb 2017

Germany softens stance on EU treaty change

  • Schaeuble: 'Where it cannot be done within the current legal framework, we will do on an inter-governmental or bilateral level' (Photo: consilium.europa.eu)

The eurozone's planned banking union is "urgent" and should be created within the current EU treaties, German finance minister Wolfgang Schaeuble said on Tuesday (7 May) after previously suggesting a treaty change was needed.

"Banking union is a central project, we need institutional changes but we cannot wait for a treaty change. We need to work with what we have," Schaeuble said during a debate with his French counterpart Pierre Moscovici at the Berlin Free University.

Dear EUobserver reader

Subscribe now for unrestricted access to EUobserver.

Sign up for 30 days' free trial, no obligation. Full subscription only 15 € / month or 150 € / year.

  1. Unlimited access on desktop and mobile
  2. All premium articles, analysis, commentary and investigations
  3. EUobserver archives

EUobserver is the only independent news media covering EU affairs in Brussels and all 28 member states.

♡ We value your support.

If you already have an account click here to login.

He explained that after the Cyprus bailout negotiations - which involved imposing losses on depositors - it is "urgent to have unified rules" on how to deal with failings banks in the eurozone.

"Where it cannot be done within the current legal framework, we will do on an inter-governmental or bilateral level," Schaeuble added.

The German minister last month suggested a treaty change was needed to complete the banking union - a step which would require years of horse trading among member states.

Both the legal services of the European Commission and the European Council disagreed with him on whether a treaty change is needed.

The German shift on treaty change on Tuesday was accompanied by a somewhat softer stance on deficit reduction, after the EU commission last week gave France two extra years to meet its deficit target.

Schaeuble said his government shares Brussels' view that France is committed to structural reforms and that sometimes countries have to be given more time to meet targets.

He was less forthcoming when it comes to Germany showing more "solidarity" - meaning picking up the tab for failing banks in other countries - as France is asking for, however.

"We would never vote for each other's party," the centre-right German politician said about Moscovici, who is from the Socialist camp.

"But we have a common task and conviction that France and Germany have a special responsibility for Europe. Now, of course, we still have to discuss the right balance between mutualisation of risks and responsibilities," Schaeuble noted.

For his part, Moscovici said Paris would never agree to ceding more sovereignty to Brussels - a German demand - unless the eurozone manages to transform itself into an area where young people find jobs.

"Europe is not just about common discipline, but also a project of more employment and democratic scrutiny," Moscovici said.

He repeated the idea of having a eurozone-only budget helping to level out macro-economic imbalances and said that in the medium term there should be a eurozone economics minister who should be supervised by the European Parliament.

Moscovici also spoke of the need for more harmonised interest rates for small and medium enterprises (SMEs).

"SMEs in Italy don't have the same chances as SMEs in Germany because they do not have the same financing conditions. We'll work on this together, I know what the German limits are concerning the institutional framework. But we need more solidarity, it is still underdeveloped," Moscovici said.

Schaeuble retorted that SMEs get higher interest rates on loss in Italy compared to Germany in part because business conditions there still need reform, for example, to have more quickly responsive courts.

Responding to a question from the audience, Schaeuble said he is "worried" about Germany's image abroad, about a German Europe.

"We have to take it seriously and Franco-German relations are important in countering it," he said.

He also noted that while being criticised abroad for pushing for too much austerity, within Germany government critics often say Germany is not doing enough to save money.

For his part, Moscovici said Germany is about more than just austerity.

"We need to stay away from caricature. Although I admit some of my friends do it too," the French Socialist said, in reference to a recent position drafted paper by his party which blamed Chancellor Angela Merkel for being "selfish" on EU financing.

"Of course, traditionally, Germany focuses greatly on rules. It also needs to be flexible, to understand how things work. There is no one-size-fits-all rule. But overall, we have good Franco-German relations," Moscovici said.

He added, jokingly, that one irritant may be the fact that German football teams are "winning too much lately."

Germany denies stalling on banking union

The German government has denied putting the brakes on the eurozone's "banking union," but says it would require an EU treaty change which could take years.

Juncker envisages EU of core groups

Commission head Juncker say EU states which want deeper integration should press ahead in core groups, in reaction to the UK’s departure.

French police raid Le Pen's party office

Officers raid the National Front headquarters near Paris over allegations that leader Marine Le Pen used fake EU parliament contracts to pay her personal staff.

Le Pen used 'fake' EU parliament jobs

A leaked EU anti-fraud office report says French far-right leader, Marine Le Pen, had her bodyguard and personal assistant paid by the EU parliament for jobs they did not do.

EU commission drops anti-corruption report

Transparency campaigners are livid after the EU commission scuppered plans to publish an EU anti-corruption report amid unfolding corruption scandals in Romania and France.

News in Brief

  1. Spanish court jails former IMF chief Rato
  2. Macron proposes Nordic-style economic model for France
  3. Germany posts record high budget surplus
  4. Labour ousts Ukip in Brexit homeland
  5. Dutch lower house approves EU-Ukraine treaty
  6. WTO says Russian pork ban was illegal
  7. Belgian nuclear plant made 'significant progress' on safety
  8. Report: Commission gauging EU support for Poland sanctions

Stakeholders' Highlights

  1. EURORDISJoin the Rare Disease Day and Help to Advocate for More Research on Rare Diseases
  2. European Healthy Lifestyle AllianceStudents Who Are Considered Fit Get Better Grades in School
  3. QS World MBA TourMeet with Leading International Business Schools in Paris on March 4th
  4. Malta EU 2017Economic Governance: Agreement Reached on Structural Reform Support Programme for Member States
  5. Socialists & DemocratsWomen Have to Work Ten Years Longer to Match Lifetime Earnings of Men
  6. Counter BalanceTrans-Adriatic Pipeline Is a Major Risk for Banks, Warns New Analysis
  7. Martens CentreEU and US Migration Policies Compared: Join the Debate on February 28th
  8. Swedish EnterprisesTechnology and Data Flows - Shaping the Society of Tomorrow
  9. UNICEFNearly 1.4 Million Children at Risk of Death as Famine Looms Across Africa and Yemen
  10. Malta EU 2017End of Roaming Fees: Council Reaches Agreement on Wholesale Caps
  11. Nordic Council of MinistersNordic Innovation House Opens in New York to Help Startups Access US Market
  12. Centre Maurits CoppietersMinorities and Migrations