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Germany cautious on French idea for eurozone fiscal transfers

Published 01/09/2015, 22:08
Updated 01/09/2015, 22:17
© Reuters.  Germany cautious on French idea for eurozone fiscal transfers

BERLIN (Reuters) - Germany on Tuesday put the brakes on a French push for the euro zone to appoint a new commissioner with powers to coordinate economic policy across the bloc and preside over fiscal transfers between its 19 members.

French Economy Minister Emmanuel Macron had floated the idea in an interview with a German newspaper earlier this week, saying that the euro zone status quo would lead to the currency union's self-destruction.

Macron wants a new European economic government, with a euro commissioner who has the financial means to make investments.

Responding to idea, German Vice Chancellor Sigmar Gabriel sounded a note of caution and urged Macron to detail his plan.

"To my French colleagues, I say 'You need to flesh this out'," Gabriel told reporters in Cologne.

"Money must be generated for the Eurogroup budget," he added. "My big concern is that next someone will have the idea that this will be raised from ordinary people with a euro tax, or a value-added tax. I would be strictly against that."

The idea of fiscal transfers from richer to poorer euro zone states is anathema to Germany's ruling class, with Chancellor Angela Merkel's government having firmly resisted any form of permanent transfers to poorer countries in the bloc.

Ralph Brinkhaus, deputy parliamentary floor leader for Merkel's conservatives, voiced his opposition to Macron's ideas.

"This is not the time to demand a fundamental renewal and further deepening of the European Union," Brinkhaus told Reuters.

"First of all we need to get to the point where the member states stick to the jointly agreed rules, for example on financial stability," he added.

The European Commission has agreed to extend by two years until 2017 the deadline for France to bring its budget deficit below 3 percent of gross domestic product.

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