France’s proposal to create an economic government for the euro area with its own budget requires treaty changes for which there is no appetite among European Union leaders, European Parliament President Martin Schulz said Monday.
Euro-region governments can only act within existing law for now to rein in “macroeconomic imbalances,” Schulz told reporters in Berlin. He was responding to French Economy Minister Emmanuel Macron’s push for Germany to drop its “taboos” on financial transfers.
“You need treaty changes for that and I don’t see these treaty changes at present,” Schulz said after attending a meeting of Germany’s Social Democratic Party, which is Chancellor Angela Merkel’s junior coalition partner. Existing euro-area budget rules could be “expanded” and the region’s banking union deepened, he said.
As euro-area governments try to draw lessons from the debt crisis that spread from Greece in 2010, attention is focused on France and Germany, the region’s two biggest economies. Germany and France are discussing how to promote “economic convergence,” Merkel said at a separate news conference.
Macron, in an interview with Sueddeutsche Zeitung, proposed a euro-area government complete with a joint budget and parliament. Macron told the German newspaper he’s confident that Europeans would back treaty changes as long as they’re big enough o allow a “re-foundation” of Europe.
Ralph Brinkhaus, one of Merkel’s deputy caucus leaders in parliament, demanded that France fulfill commitments to reduce its budget deficit first.
“Now is not the time to call for a fundamental renewal and further deepening of the European Union,” he said in e-mailed statement. “France, for example, hasn’t reduced its budget deficit in accordance with originally agreed provisions.”
Macron said “we can forget the euro and the euro zone” as long as Germany and other members continue to reject any kind of financial transfers within the monetary union.