Macron's Euro-Zone Plans Hit a German Speed Bump

The expectations could not have been higher. After the election of Emmanuel Macron in France, there was hope that the euro zone could finally press ahead with an overhaul of its economic governance, which would make it more resilient in a crisis.

The contours of the planned deal were very clear: Fiscally conservative countries, such as Germany, would agree to greater “risk-sharing,” for example setting up a joint scheme to guarantee deposits or a “rainy day” fund to help countries facing a shock. Meanwhile, vulnerable states such as Italy or Portugal would agree to reduce risks in the balance sheets of banks and in the public finances.