Germany Wants More Eurozone Integration Than Ever Before
Leftist Bloomberg.com is extremely happy with the results of the coalition talks between Angela Merkel's CDU and Martin Schulz's SPD parties:
We may have no idea which shape the eurozone will take in the future, but we know one thing for sure: Any change to the structure of the currency union will need to be agreed to by Germany, the bloc's biggest economy and the largest contributor to the EU budget.
The section on Europe in the draft coalition agreement between the Christian-Democrats and the Social-Democrats is, as far as Bloomberg is concerned, very positive. "Germany's largest parties seem keen to go further on the road to eurozone integration than ever before."
Although this is decidedly not what European voters want, it is the establishment left's Great Dream. And so, Bloomberg is celebrating:
To understand why, let's take a short step back into the recent past. Angela Merkel, who is seeking a fourth term as chancellor, spent much of the autumn negotiating a three-way deal with the Greens and the Free Democratic Party. The FDP, led by Christian Lindner, had drawn a red line at the idea that the eurozone should have a budget and vehemently opposed transfers across the currency union.
The talks collapsed, prompting Merkel to negotiate with the SPD's leader Martin Schulz, a committed federalist who has been president of the European Parliament. This was excellent news for anyone who believes the currency union has to move closer together in order to thrive: Germany made important concessions at the height of the sovereign debt crisis, for example agreeing to set up a euro-zone rescue fund (the European Stability Mechanism). However, in the last few years, Berlin has been resistant to further risk-sharing, insisting that governments should first reduce their budget deficits and prompt banks to clean up their balance sheets. A three-way deal with the FDP and the Greens would have meant more of the same.
Last week's position paper is, Bloomberg continues, "a quantum leap compared to Lindner's intention." Sadly, that's not an exaggeration. The paper talks about the need to "emphasize specific budgetary resources for economic stabilization, social convergence, and support for structural reforms in the eurozone," and even about setting up "an investment budget for the eurozone." This fund could be managed by the European Parliament. This is the same Parliament only very few Europeans actually take the time to vote for, believing it to be either an irrelevant institution or a "too far from my bed" show.
The European Commission -- which is basically the EU's unelected cabinet -- is undoubtedly happy with the German position paper. The EC has already said it wants to create a "stabilization fund" to help "struggling" European economies. It goes without saying that prosperous EU member states, like the Netherlands and Germany, will again be forced to pay for such a fund.