Merkel’s conservatives seek to limit her room on euro zone reform

The paper reflects German conservatives’ strong resistance to German taxpayers’ money being splashed about under any euro zone reforms, which Macron is eager to champion.

“Our guiding principle is that the assumption of risks by a member state must be accompanied by the liability of that state,” read the proposal — seen by Reuters — for debate by the conservative parliamentary bloc on Tuesday.

Macron was elected last May on a promise to overhaul the European Union, and has called for a euro zone budget to help the bloc cope with external economic shocks.

The paper said Germany and France should not act as an exclusive alliance in the EU.

“We must not overstretch the European Union, because disappointment among citizens over Europe would weaken the successes and acceptance of the European idea,” it added.

In a separate position paper, Leikert and two other senior conservative lawmakers stressed that any reform of the euro zone’s bailout fund, the government-controlled European Stability Mechanism (ESM), into a full-blown European Monetary Fund (EMF) must see it become an independent institution, not subject to control by the European Commission.

“In order to maintain its independence, the EMF must be recognised as an independent institution in EU law (as with the EIB or ECB). A right of instruction for the European Commission must be ruled out,” the position paper, dated April 13, read.

But Merkel, who has just begun her fourth and probably final term in office, faces fierce resistance from her conservative bloc to any reforms that would see German taxpayers assume liability for other countries’ debts.

Finance Minister Olaf Scholz, a member of the Social Democrats, Merkel’s coalition partner, said in a weekend newspaper interview that EU reforms proposed by Macron should be addressed before European elections next year. But he added that some of the proposals were not feasible.

Source: Reuters