Monday , May 16 2022

Paris gets Berlin support at the start of the eurozone budget


Some victories are first semantic. Finance ministers of France and Germany presented their colleagues Monday in Brussels with their joint proposal for the start of the eurozone budget, which is expected to begin operating in 2021. To make this franco-German contribution made by Bruno Le Maire and Olaf Scholz, he answered, on the shoulders, to journalists' questions. "This is a big break for me"rejoices to the French. It is a progress that is directed at its neighbor, "Because nobody says this will never happen".

Undefined amount

Nobody says it's a triumph for France. Paris initially hoped for an autonomous budget with great ambitions, which in its conception could solve the shortcomings of the unsuccessful euro zone, after it seized the member states of monetary weapons.

The Franco-German proposal is finally focused on a budget that is linked to the EU's budget framework, as it already exists, but will, however, ensure that its management will be ensured only by members of the zone of the euro zone. Part of funding comes from new resources – which will point to another complicated discussion. And its quantity, in particular, at this stage is uncertain.

In its role, this budget will support public investment in sectors that are considered strategic for the future (physical and human infrastructure, innovation support). He could also fulfill stabilization functions in the case of a cyclical cold in a country, hoping for Paris. But at this moment, the debate is not decided between the three options on the table. One, pushed by Olaf Scholz, but without the clear support of Angela Merkel, would be a reinsurance mechanism for national unemployment systems. This would help support the country in the face of the fact that its wages for unemployment are rising sharply. The second is to allow the country in the midst of the recession to stop participating in the joint budget. The third would function on the principle of the borrowing mechanism for that country.

Conceptual victory

In Paris, the first is insisting on a conceptual victory. The budget mandate of the eurozone has horrified many European finance ministers when Franci put it on the table. In Berlin, in particular, the ghosts evolved. In all likelihood, Monday's Brussels debate was quieter than before.

It must be said that the Franco-German proposal offers serious guarantees for the most urgent countries, especially in that the financing of this future budget requires compliance with European public finance rules. Just enough to say that Italy today, in its full drift, has taken on its financial path, can not ask for this kind of funding. It is surprising that Matteo Salvini strongly criticizes the Franco-German project. The Vice President of the Italian Council warned: if this proposal, "It seems to be the case, damaging Italy, it will never have our support".

Dutch barrier

By virtue of its merit, it is largely the strongest country on financial issues that will probably be reluctant. Their informal leader, the Dutch finance minister, might be incalculable. While demonstrating minimal goodwill, Vopke Hoekstra was clear when he arrived in Brussels about a possible budget for the eurozone: "Is this in the interests of the Netherlands? Is it in the citizens' interest? I am not convinced. In addition to the ideological divergence on this topic, the minister knows that a fragile coalition in which it appears engraved in marble, at the time of its establishment, a categorical rejection of any budget of the eurozone. The evidence that France identified the obstacle Bruno Le Maior must receive Thursday in Paris.

Gabriel Gresillon

Brussels office
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