Wednesday

20th Sep 2017

Juncker's eurozone vision raises doubts

  • "Economic preconditions are necessary and they must be met," German minister Schaeuble insisted. (Photo: Council of the EU)

Eurozone leaders on Friday (15 September) tempered the European Commission's vision of simultaneously deepening and extending the monetary area in the coming years.

"I don't believe that countries could be forced or pushed into this process [of eurozone accession]. I don't think that's wise or realistic," said Eurogroup president Jeroen Dijsselbloem.

  • EU commissioner Moscovici (c) and Eurogroup chief Dijsselbloem argued over the informal group's transparency. (Photo: eu2017ee/Flickr)

He said that the 19 euro countries "should work very hard to strengthen the monetary union", and that "the process of expanding the eurozone will continue as it has continued."

On Wednesday, in his state of the union speech, commission president Jean-Claude Juncker said that by 2019 he would like it if "being a full member of the euro area, the banking union and the Schengen area has become the norm for all EU member states."

But in Tallinn, EU finance commissioner Pierre Moscovici assured that Juncker only said that "the door must be open", while ministers insisted on accession criteria.

"Economic preconditions are necessary and they must be met," Germany's Wolfgang Schaeuble, the most influential finance minister at the table, pointed out.

He added that accepting new countries when conditions are not met would "endanger the stability of the whole monetary union."

Experts agree that for now, none of the seven countries that could join the euro - Denmark and the UK have opt-outs - meet the criteria. The last one to join the club was Lithuania in 2015.

More integration

"The most important challenge now is the reinforcement of the eurozone," rather than its extension, French minister Bruno Le Maire said.

"Enlargement is possible. But if we want the enlargement to be a success, first of all we need a reinforcement and more integration within the eurozone," he said.

Le Maire's insistence on action "within" the eurozone was a reply to Juncker, who on Wednesday rejected the idea pushed by the French president, Emmanuel Macron, of a eurozone budget with a eurozone minster and a eurozone parliament.

He noted, however, that the debate is only just beginning, and said he hoped that "a consensus towards more integration" can be reached "in a few months".

"France is back", also boasted Le Maire, whose name has started to circulate as a replacement for Dijsselbloem, as the Dutch politician's mandate ends in January.

The position of Eurogroup president itself is also part of the debate, with Juncker proposing to include it in the portfolio of a future "European finance minister".

This idea also received a lukewarm response.

"It's a title but it doesn't tell me a lot about the substance," noted Dijsselbloem, asking "what would the responsibilities be, what instrument would this minister have?".

Democratic accountability

The Eurogroup chief insisted that the discussion should start "on the other end … from what the problem is and end with an institutional debate."

"Let's have a debate about what is lacking in the monetary union - in terms of resilience, competitiveness, solidarity," he said.

Another debate went on in Tallinn, with a verbal sparring between Moscovici and Dijsselbloem at a press conference over the Eurogroup's transparency.

Moscovici, who said last month that the Eurogroup is a "democratic scandal", argued that "as far as democratic process is concerned, frankly speaking, we can do much, much better."

He specified that he has nothing against the "more than fine" leadership of the Eurogroup or the "substance" of the decisions taken.

He said that it was about the "broader issue of what democracy is".

"Democracy is about democratic accountability," he said. "That means that you have an executive, that means that you have leadership, that means that you have debate, and that you have control. I must say that this is not fully the case in the Eurogroup."

For the finance commissioner, the answer to the problem "is in the speech on the state of the union" speech delivered by his boss, Juncker, on Wednesday.

'If it ain't broke, don't fix it'

"I have strong objections," Dijsselbloem retorted.

The Eurogroup chief argued "closed doors help effectiveness" when hard decisions have to be taken, but that he has been "pushing to get more transparency around our meetings".

He said that members of the Eurogroup, an informal body of ministers, were being "scrutinised" by their national parliaments.

"I don't agree with that matter, that the Eurogroup, because it is intergovernmental, is not democratic," he said.

He insisted that the Eurogroup, which he has chaired since 2012, "has functioned very well and effectively in very difficult circumstances."

He added that the group could be "incorporated into the institutional framework of the EU", but that its intergovernmental nature created trust between governments.

"If it ain't broke, don't fix it," he concluded.

Analysis

Juncker rules out exclusive eurozone

The EU Commission president said that he wants "a stronger Economic and Monetary Union" but ruled out any ideas that could create a separate group within the EU.

Bank agency shuns EU invitations

The EU's banking agency is not visiting cities that want to host the agency post-Brexit "to ensure objectivity". The medicines agency has no such qualms.

Investigation

EU bank accused of muzzling watchdog

An ongoing review of the the European Investment Bank's "complaints mechanism" could make the oversight branch less independent and less effective.

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