Tuesday

17th Oct 2017

Merkel speaks out for two-speed Europe

  • Merkel is making big political statements about the future of the EU - but what do others think? (Photo: ec.europa.eu)

German Chancellor Angela Merkel has said she will use the gathering of EU leaders at the end of the month to push ahead with plans for a political union, including more sweeping powers to Brussels.

"We do not just need a currency union but also a so-called fiscal union - more common budget policy," she told Germany's ARD television early Thursday (7 June).

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She emphasised that a political union was also necessary: "That means that step-by-step in the future we have to give up more powers to Europe and grant Europe more oversight possibilities."

While there has been a concerted effort over the last two years to make sure that all 27 member states are on board when it comes to further integration steps, Merkel said ambitious states should not be held up by recalcitrants.

While it should be made possible that all member states take part "we should not stay still because one or other [member state] does not yet want to join in," said the Chancellor, making the clearest case yet for a two-speed Europe in matters of economic integration.

While these statements and similar comments she has made in the past are raising expectations about what the 28 June summit in Brussels can achieve, the German leader cautioned against thinking that it would lead to a big bang solution for the European Union.

But even despite Merkel's traditional down-playing of expectations ahead of an EU meeting - the summit is increasingly taking on a high-stakes feel.

It will take place after the Greek elections (set to determine the immediate future of the country in the eurozone) and the French parliamentary elections (freeing up President Francois Hollande from the domestic political arena).

Senior EU officials are working on plans to increase EU integration, including a banking union - seen as necessary to ensure the future survival of the single currency.

While Berlin has been leading the eurozone's aid response to troubled eurozone countries such as Greece, Ireland and Portugal, it is now also leading the debate on further political integration.

This push to give more powers to the EU level - part of Berlin's attempt to make sure countries keep their budgets in order in the future - is likely to expose deep fault-lines among member states.

France's response will be of particular interest.

Traditionally, the Franco-German engine has driven the EU forward. However, when it comes to the details, Paris has always been reluctant to give over-arching powers to the European Commission.

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UK sounds alarm on banking union

The UK has signalled it accepts that a eurozone banking union will go ahead and that it will not be onboard but warned it will seek "safeguards" to protect its financial sector and the single market.

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Crisis rescue programs and the next seven-year EU budget have political implications that go beyond economics.

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EU commission president said that eventually there will have to be a two-speed Europe, in which core countries will work together more closely than with others.

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Spain's king, Felipe VI, said Catalonia's leaders were breaking up the country's unity as hundreds of thousands of Catalans rallied against police violence at Sunday's referendum.

Austrian voters reject liberal pro-EU status quo

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