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Merkel comments on Eurozone reform show move

05 June 2018
Merkel comments on Eurozone reform show move

German Finance Minister Olaf Scholz on Monday said he endorsed German Chancellor Angela Merkel's vision for a European fund for investments in weaker member states in the euro zone.

Macron wants to turn Europe's existing bailout fund into a European Monetary Fund (EMF), to act as a buffer in any future financial crises in the bloc, which was almost torn apart in a debt crisis in 2009. EURACTIV's partner Der Tagesspiegel reports.

Institutional changes to the European Union would ensure that "its voice is taken seriously in the world", she said. Merkel also said that a future EMF would be organised on an intergovernmental basis and national parliaments of member countries would have oversight.

Dombrovskis did not want to comment on this option. "The strategy of working together is the only way to strengthen the euro zone and the European Union".

When it comes to assessing Italy's new governing coalition, made up of the anti-establishment 5-Star Movement (M5S) and the far-right League, DW noted that Merkel has remained among the calmer voices.

Top exporter Germany is especially vulnerable to a trade conflict with the United States and several analysts said the threats from Washington had given the notoriously cautious Merkel added incentive to reach out to Macron.

The idea of sovereign debt restructuring is seen as controversial as it could scare investors and create market turbulences, as happened the first time it was proposed by Merkel and then French President Nicolas Sarkozy in October 2010 in a bilateral summit in Deauville (France).

The comments suggest a new willingness by Ms. Merkel to engage with Mr. Macron's proposals, despite signs this year that the chancellor would cede to domestic pressure to keep any eurozone overhauls to a minimum.

He has called for a far bigger euro zone budget than Merkel spelled out in her FAS interview and urged Europe to become a bolder, more autonomous actor in defence, a shift that unsettles conflict-wary Germans. Among other reasons, because the ESM treaty also requests that the public debt of a member state requesting financial assistance must be sustainable.

The Elysee Palace said in a statement that "Merkel is concerned about European sovereignty, including the issue of migration". Twenty-three member states signed up to a defence cooperation pact past year after Britain dropped its opposition in light of Brexit.