At the gates of an election campaign, european leaders had been given until December to agree to major economic reforms ahead: the budget of the euro area, the fund of guarantee of deposits or the rate on the tech giants. The French president, Emmanuel Macron, had proposed to open a new era for the single currency with which to wage battle next may to movements eurosceptics and populists.
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Brussels looking at Spain as an ally to the reform of the euro elections put pressure to advance the reform of the euro
however, yesterday the ministers of Economy had only outlined the reforms that the minister of the Economy, Nadia Calviño, admitted that, although important, were less sexy to sell to the electorate. The Eurogroup had virtually agreed on reforms to close the legs of supervision and resolution of financial. It was a safety net for bank bailouts that would be used as a last resort and that, according to eu sources, could be operational before 2024 if we continue to reduce risk at the current rate. In addition, they discussed the details of a reform of the Esm in order to give it more tools for crisis management.
But after 14 hours of meeting, breaks, and bilateral meetings, the partners of the euro will not be reluctant to talk of any agreement. And all this with a back and forth of the French minister, Bruno Le Maire, to Paris to attend an urgent meeting. Even so, diplomatic sources insisted that they wanted to try to tie up a deal until the last moment, and believed that the meeting could drag on even until nearly the entrance on Tuesday morning.
Although they were to close those two reforms, the Banking Union would remain incomplete. The debate on the eurobonds is parked and Germany continues to reject the deposit guarantee fund which, according to eu sources, last night had no chance Milanobet to thrive. The chairperson of the Single Supervisory Mechanism (MUS), Danièle Nouy, said on Monday that the risk in the banking sector “has been reduced enough to start the journey” towards that mechanism. But for the Government of Angela Merkel such a reduction in the rate of delinquent loans —up to 3.4% in the EU— is still insufficient to share risks.
On this occasion, Italy has given Germany the arguments for postponing the debate. The challenge launched with a Budget that violates the community rules will be added, according to eu sources, the refusal of Rome to set limits to the sovereign debt on bank balance sheets. To Berlin are not enough, nor the adoption of measures to reduce financial risks that the ministers planned to take forward today, nor the numbers of the Commission.
“The countries are doing their duties in the reduction of risks. There’s No excuse,” said other community sources. Hours before the meeting, the commissioner for Economic and Monetary Affairs, Pierre Moscovici, had warned that it would be “disappointing” that the meeting does not result in a political commitment on this fund.
Budget euro
The efforts of Macron have focused on the Budget of the euro zone. The axis franco-German presented in the Eurogroup of November, a proposal which, although limited to investments, was a first step to creating a budget crisis. France and Germany argue that, when it comes to a recession, investments or plummet, or cause the deficit to skyrocket, so that this fund amortiguaría the blow.
This idea of “stabilization” is precisely the one that complains the Netherlands. His Finance minister, Wopke Hoestra, threw irony to say that this project had gone from being an “elephant” to a “mouse cage”. Precisely, this lack of interest in the Netherlands was hope to the defenders of the Budget that it was still possible to boot some kind of agreement, although throughout the meeting it became clear that was not going to be so easy. I had not, however, to the unemployment insurance european, who was also in the roadmap of France and Germany for December, and that Spain defended in the Euro Summit and the last Eurogrupos.
The uncertainty about the correlation of forces that may throw the elections in may has raised concerns to the European Commission that the time is up for reform. Before the meeting, Calviño said that what was important were the steps that were given, but Moscovici regretted that these were not very large. In other words, Europe is moving, but steps of turtle.
