Business World

Sunday 21 January 2018

Germany’s Wolfgang Schaeuble calls for more integration ahead of EU summit

Gernot Heller

GERMANY’S Finance Minister Wolfgang Schaeuble has called ahead of an EU summit for a great leap forward in European integration, urging the creation of a new commissioner with power over budgets and reform of European Parliament decision-making.

Such a reform would accelerate the trend towards a two-speed Europe whose inner core would be the euro zone, spurred towards closer union by its three-year-old sovereign debt crisis.

Schaeuble, a long-time advocate of closer EU integration who is not shy about voicing his personal views, said he had spoken with Chancellor Angela Merkel about his proposals and that she was "somewhat more cautious".

"We must now make bigger steps in the direction of a fiscal union," Schaeuble told reporters on his way back from a trip to Asia. "We must use this chance."

Some of Schaeuble's ideas are likely to stir unease even within the currency bloc.

He said a new "currency commissioner" should have the power to reject national budgets that were not in line with the euro zone's strict fiscal criteria, without specifying whether such a figure should have the power to impose penalties.

The model for the position would be the bloc's competition commissioner, who Schaeuble said was "feared in the whole world".

He also called for more flexible voting arrangements in the European Parliament to accommodate closer integration between euro zone states.

European officials are looking for ways to boost the democratic legitimacy of a closer union, but have run up against the dilemma that the European Parliament includes countries from outside the euro zone.

"In the European Parliament lawmakers only from countries directly affected by a given issue should vote on it," Schaeuble said.

Such proposals could struggle to win acceptance in countries such as France, reluctant to surrender more sovereignty to EU institutions, while economies such as Greece, reeling from German-backed austerity programmes, will be wary of entrenching the power of outsiders to run their financial affairs.

A previous proposal from Schaeuble for a "Sparkommissar", or savings commissioner, was quietly dropped after it stirred fury in recession-mired Greece and got a cool reception from Germany's other European partners.

Addressing German employers in Berlin on Tuesday, Merkel said Germany did not aim to create new divisions in Europe in pressing for greater fiscal and political integration.

"We do not want to split Europe. Everything is being done so that any country which wants to take part in additional measures of integration can join us," she said, adding that the euro zone itself was by no means limited to its current members.

Schaeuble said he wanted EU leaders to discuss his ideas at this week's Brussels summit, adding that they could launch a 'convention' by December tasked with drafting a new treaty.

Merkel has previously said she would like the EU's December summit to agree a concrete date for the start of a convention.

The idea recalls the 100-plus strong gathering of EU lawmakers set up in 2001 - inspired by the Philadelphia Convention that led to the adoption of the U.S. federal constitution - charged with preparing a European charter.

The document that emerged was rejected by French and Dutch voters in 2005 and a watered down version ended up forming the basis of the EU's Lisbon Treaty, which is in force today.

Many member states, recalling the lengthy disputes and setbacks that preceded the Lisbon treaty's entry into force, are reluctant to embark on another process of institutional reform.

But Germany believes a much closer fiscal and political union is needed to ensure the success of painful economic reforms and the long-term survival of the euro currency.

"We need a lasting solution," Schaeuble said.

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