Move on joint budget to save eurozone, France urges Germany

French Economy Minister Bruno Le Maire (AFP pic)

FRANKFURT: French Finance Minister Bruno Le Maire urged Germany Thursday to “move quickly” on European reforms the two countries agreed in June, calling the creation of a joint budget an existential question for the eurozone.

“We have to move quickly to implement the plans” to reform the European Union and single currency area laid out by Chancellor Angela Merkel and President Emmanuel Macron, Le Maire told Munich-based daily Sueddeutsche Zeitung.

“Either there will be a eurozone budget or there will some day be no more eurozone,” he added.

The former conservative minister, who switched allegiance to Macron after the outsider candidate’s surprise victory on a pro-EU platform last year, played down likely resistance from within Merkel’s centre-right camp to a joint budget.

“A currency union must be strong enough to face a new crisis. The next could be even more devastating than in 2008,” he warned.

Cuts following the post-2008 crisis have left visible scars in the economies of euro members like Portugal and Ireland, Le Maire said.

But those could have been avoided with “a mechanism that protects government spending that supports growth over the medium and long term,” he added.

As well as the common budget, Merkel and Macron called in the summer for business tax alignment around the EU and a new levy on internet giants.

Other member countries dug in their heels, while Merkel has been distracted by internal bickering that has twice threatened to bring down her fragile governing coalition.

Domestic politics “can’t be an excuse on either side to delay pressing European decisions,” Le Maire said, adding that “taking no decisions feeds populism”.

The treasury chief noted that other nations like the Netherlands and Luxembourg were backtracking on their initial resistance to a digital tax.

“If we have an agreement with Germany, then the other EU countries will come aboard,” he predicted, adding that “some are already moving”.

Dismissing fears of retaliation from Washington, he declared that “it should be clear to everyone that (US President) Donald Trump only respects those who show strength and decisiveness.”

As for the companies themselves, “we don’t need to fear Google, Amazon and Facebook. We’re among their best customers,” Le Maire said.

“We Europeans have the power, we need to exercise it.”