Macron Pushes More Integrated Europe, With Eye on Germany
26 September 2017 - 2:01PM
Dow Jones News
By William Horobin in Paris and Marcus Walker in Berlin
French President Emmanuel Macron wants his voice heard as
Germany forms a new government.
Mr. Macron is due to flesh out his proposals for deeper
integration of the European Union and its common currency, the
euro, in a speech at the Sorbonne university in Paris on Tuesday.
The timing of the speech, two days after Germany's elections, is
aimed at influencing German Chancellor Angela Merkel's talks with
potential coalition partners, French officials say.
The young French leader knows his ambitious calls for a deeper
union between the euro's 19 members are controversial in Germany,
and wants to set out France's position before politicians in Berlin
start to discuss their future policy on Europe, they say.
The outcome of the tussle between the EU's two dominant nations
will be central to the eurozone's future. Although the bloc's
economy is finally enjoying solid economic growth after years of
slow recovery, officials in Paris and Berlin say the euro's
members' economies continue to diverge, leaving the region
vulnerable to future turbulence such as the debt crisis that pushed
the bloc to the brink of collapse in 2010-12.
Ms. Merkel's conservative Christian Democrats came first in
Sunday's German elections but with a shrunken share of the vote.
She is now exploring the scope for a governing coalition with the
left-leaning Greens and the pro-business Free Democrats. Such an
alliance would have to reconcile major ideological differences on
Europe, as on many other issues.
The Free Democrats, known as the FDP, are particularly skeptical
about France's push to create a shared eurozone budget to boost
investment and fight against economic shocks.
Ms. Merkel also has strong reservations about Mr. Macron's
ideas, but she has expressed her willingness to talk about
them.
Berlin officials say the chancellor doesn't want to embarrass
Mr. Macron by flatly rebuffing him, because Germany is keen for him
to succeed in his simultaneous efforts to overhaul France's
economy.
"I'm not going to be ruling everything out in advance. We can
have more Europe, but it has to lead to more competitiveness, more
jobs, and more effectiveness of the European Union," she told a
news conference on Monday. "Besides, we have to talk with the FDP
about it first anyway."
Mr. Macron has previously said a budget for the eurozone should
be worth several percentage points of the bloc's gross domestic
product, and be funded by common borrowing as well as a portion of
taxes that are currently national. He has argued that the
eurozone's current design isn't stable enough to survive in the
long term, and that it needs a fiscal union to absorb economic
shocks, as well as a common finance minister to manage the central
budget.
Such ideas have long been anathema to German center-right
politicians in both Ms. Merkel's party and the FDP. The dominant
view in Berlin is that the eurozone's future stability relies on
its member countries reforming their national economies to make
them leaner and more competitive, rather than on large
public-spending plans at the European level.
The FDP was dismissive of Mr. Macron's proposals during the
election campaign and is seen in Paris as the biggest foe of the
changes Mr. Macron wants. On Monday, FDP leader Christian Lindner
moderated the party's tone, saying he opposes lasting fiscal
transfers between euro members, but that he is willing to talk
about measures to boost investment in the eurozone, including
within the existing EU budget.
France and others in Europe are watching closely to see who will
control the German finance ministry in Ms. Merkel's next
government. The FDP said before the elections that it would lay
claim to the ministry, a major power center in setting the
eurozone's finance policies. On Monday, FDP leaders said publicly
that policies, not ministries, were their priority. Behind the
scenes, the party is expected to push for the finance post,
however.
Germany's current finance minister Wolfgang Schäuble, one of the
EU's most influential figures in the past eight years, is known to
want to continue in his job, and has the backing of his Christian
Democrats. Mr. Schäuble is an advocate of stricter fiscal
discipline in the eurozone but is seen as slightly more open than
Ms. Merkel, or the FDP, to some of France's federalist ideas.
Mr. Macron has a lot riding on whether he can bend Berlin toward
his federal European vision. The 39-year-old won France's
presidential election promising skeptical French voters he could
improve their lot in Europe through changes to the EU, rather than
taking the bloc apart, as his main rival National Front leader
Marine Le Pen had promised.
In his first four months in power, Mr. Macron has quickly pushed
through unpopular measures at home that Paris hopes will boost
France's economic performance and its political clout in Europe.
Overhauls include spending cuts to bring France's deficit within EU
rules, and changes to labor laws to make the country's job market
more flexible.
The young leader's approval ratings have sunk swiftly as public
support for those policies has proved limited. It isn't clear,
however, that Mr. Macron's efforts at home are sufficient to
convince Berlin to sign up to his European initiatives.
Write to William Horobin at William.Horobin@wsj.com and Marcus
Walker at marcus.walker@wsj.com
(END) Dow Jones Newswires
September 26, 2017 08:46 ET (12:46 GMT)
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