Macron Win Would Help European Integration, Italy's Padoan Saysby and
French presidential candidate would favor common stance
Padoan says euro-area finance minister needed for integration
A victory for Emmanuel Macron in the second round of the French presidential election would pave the way for further integration of the euro area, Italy’s Finance Minister Pier Carlo Padoan said.
Under Macron, France would likely take a more comprehensive stance on the issues of risk-sharing and risk mitigation compared to countries such as Germany, Padoan said, speaking in an interview Monday with Bloomberg Editor-in-Chief John Micklethwait in New York.
The French presidential candidate would argue “in favor of a common fiscal stance, and at the same time going forward with a structural reform program,” Padoan said. “Other countries think that we need to reduce risk in absolute terms at the individual level first,” he added, citing Germany.
European policy makers have been considering for years whether to press ahead with further integration in banking regulation and fiscal policy amid opposition from nations averse to closer links and risk-sharing. A European bad bank, one of the proposals on the table, would help lenders such as Italy’s Banca Monte dei Paschi di Siena SpA, which is trying to cleanse its balance sheet of non-performing loans.
“Europe needs a strong structural reform agenda. It needs to exploit much better the single market,” Padoan also said. “I’m convinced that Macron will use his political leadership, which appears to be strong, to deliver on those areas in an integrated fashion.”
“We need to make integration in banking, we need to make integration in the fiscal domain in a number of ways,” said Padoan, the former chief economist of the Organization for Economic Cooperation and Development. “One way is to identify a European or euro-area fiscal stance, not just individual countries’ fiscal stances, but an aggregate approach which could in the future imply that we have a full-fledged, euro-area finance minister.”
The integration would not “necessarily” involve common tax rates, Padoan added. “We can make a lot of progress in identifying common tax bases, but then leave individual countries the right to impose their tax rates.”