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Euro-Reform in small steps


The EU Commission has fleshed out its proposals for the Reform of the Euro-Zone. Since the choice of Emmanuel Macron, this Plan will support in Paris and Berlin, and Brussels want to be there.

“There is now a historical window for reform,” said Pierre Moscovici, the French Commissioner for Financial Affairs at the EU Commission. He should know, because what he puts on the table in Brussels, shows a high congruence with the plans as they are discussed in Paris and Berlin currently. “The Euro is already the Symbol for the Unity and a guarantee of stability for the Europeans,” said the Commissioner, “now we need to make it a medium for shared prosperity”.

Not a Revolution, only small steps

The basic idea in this proposal is: no Revolution, we can do it in small steps. In the case of the Commission, we know that the desire to upheavals in the EU to Zero. To be done but to oppose something, especially “to the dangerous populism in Europe”, as Moscovici explains. On the wish list, a separate budget for the Eurozone, as well as a Minister of Finance. But these political decisions need to be discussed in the member countries.

In principle, it comes to repair the birth defect of the common currency, the crisis of 2008. At the time, had responded with a quick Notmechanismen, now this should be regulated by reforms replaced. “We should not wait for the next crisis,” said Moscovici. Purpose is the economic alignment of Euro area countries, both in terms of the standard of living is cycles, as well as the structural adjustment through structural reforms and the rapprochement of the economy.

We again have growth in the EU, says Commissioner for Financial Affairs Pierre Moscovici

Thus, this debate will all come to nothing, and in order to prevent dispute over may be necessary, but not a workable changes to the contract, wants to go forward, the Commission in small steps. More mutualisation in the Euro zone need, for example, more democratic control, is explained. Here is a Committee of the European Parliament to take up the reins, could be called to be the next European elections in 2019. Only after that, by 2025, will be the next steps on deeper structural reforms implemented.

What are the new measures?

After the 2008 financial crisis, several Euro countries, including, most recently, Greece, Tumbling, came, they needed quick help from the community: The Euro rescue shield was created, a Fund from which the problem countries ‘ quasi-bridging loans got. He is transplanted into the framework of the Euro-zone and a regular emergency Fund. In addition, a “financial instrument” for the protection of investments in the event of a crisis and banks and capital markets closer together. This includes the banking Union, and common rules for Deposit guarantee EDIS, which will be discussed longer. By 2019 they should be and, by 2025, introduced decided.

The Federal government rejected the mutualisation of debt through Eurobonds

The focus of contentious issues

The discussion of Finance Ministers of the Euro zone and its budget, the Commission has excluded for the time being. Another delicate case, but it brings with a new recipe on the table: A new financial instrument is titles as a “joint issuance of debt” and “joint safe asset”. It should not come to a mutualisation of debts – in Brussels, the Berlin-based concerns, however, are known. As these special Eurobonds could work, it is not entirely clear. Moscovici speaks of “private risk allocation”. Here political explosives is anyway.

As similar to the creation of a joint hedging of the national help for the unemployed. It is to be structured as a reinsurance, and in the case of an economic downturn, scope for the national budgets of the member States.

In spite of the constant protests against austerity – the Greeks don’t want to leave the Euro

Mixed Reactions

The German critics of the Euro in the European Parliament to explain, “the design faults of the monetary Union are too complex to make with financial acrobatics manageable”. Bernd Lucke, and four other members of the European Parliament from the group of the Liberal-Conservative reformers, in particular, the new edition of the Eurobonds, “old wine in new hoses”. They demand, instead of new arrivals to the mutualisation of debt in the final analysis, the resolution of the Euro and return to national currencies. But that has not been wanted, even Greece.

The largest group, in turn, the Christian Democrats and Conservatives of the EPP, welcomes the Commission’s proposals. If one wanted to strengthen the current international tensions of Europe, it is necessary to provide more stability, its Chairman, Manfred Weber. He called the common currency a success, and the growth had returned and the EU will be economically stronger. In the first step, must now accept the Euro countries in a responsible and bold structural reforms to be implemented. Then one could talk about the deepening of the Euro-zone.