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Friday 24 November 2017

Merkel, Cameron fail to resolve differences on EU Treaty changes

euro crisis

Chancellor Angela Merkel and British Prime Minister David Cameron failed to reconcile their differences on German plans for European Union treaty change and a financial transaction tax, as Mr Cameron called for "decisive action" to stem the eurozone debt crisis.

Ms Merkel said changes to EU treaties to allow for greater fiscal integration should be approved only by the 17 nations that share the euro, while Mr Cameron wants changes to be approved more widely to allow him to take back powers from Brussels.

Mr Cameron also suggested Germany support calls to allow the European Central Bank to fund purchases of troubled sovereign debt.

"All the institutions of the eurozone have to stand behind and back the currency to defend it," Mr Cameron said at a joint press briefing with Merkel in Berlin yesterday.

The lack of agreement caps a week in which Berlin and London's divergent views were laid bare over how to fix the sovereign-debt crisis and overhaul the 27 nation-bloc to make its economy more competitive. Mr Cameron earlier this week rebuffed Ms Merkel's call for political union in Europe, dismissing it as "utopian visions".

Rescue fund

Ms Merkel signalled that Europe must work with the existing tools to fight the debt crisis, saying that "every day counts" in making the eurozone rescue fund more effective.

Better budget enforcement is needed which "involves limited treaty change for members of the eurozone -- only for them," she said. The British premier said both countries have different "interests" on the matter.

Mr Cameron wants to use changes to Europe's governing rulebook to leverage concessions from EU partners that will allow him to appease euro-skeptic lawmakers after overcoming the biggest ever Conservative Party rebellion on the EU last month.

"It's obvious we don't agree on every aspect of European policy, but I'm clear that we can address, accommodate and deal with these differences," Mr Cameron said. "We had a discussion about the issue of the treaties. Germany has her interests and so does Britain."

The disagreement over the implementation of a financial- transaction tax continued after complaints from Cameron last month that London's financial district is under "constant attack" from the EU. The European Commission has proposed a plan that it says would raise €57bn a year.

Germany has been at the forefront of calls for a European transaction tax, a levy Mr Cameron is only willing to countenance if the US and Asian nations join in to prevent financial services from deserting the City.

Ms Merkel said that while British demands are justified to deploy "great strength" to regain confidence in the eurozone, "you win back credibility by using the strength that you have."

She added: "You also have to be careful not to feign strength that you don't have, because the markets will quickly come to realise that it's not going to work." (Bloomberg)

Irish Independent

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