10:01 GMT22 October 2020
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    Newly elected French President Emmanuel Macron is on collision course with Germany over plans to reform the eurozone single currency area amid a growing chasm between the northern and southern member states.

    Macron has called for the creation of a eurozone parliament, its own president and a common budget, with harmonized taxation and social policies. However, German finance minister Wolfgang Schauble has made clear he sees any eurozone parliament as having purely a "consultative role."

    Germany currently has a veto on the European Stability Mechanism (ESM), the Eurozone's bailout fund, which has been the source if disagreement with many southern eurozone states — particularly Greece, which is struggling to meet the strict terms of it third bailout, which is being largely driven by Germany. 

    "One should reinforce the [eurozone] institutions, so that the ECB doesn't always have to shoulder the burden of everything. But for that, treaty changes are needed. Hence, the second-best solution is to create a European Monetary Fund by developing the statute of the ESM," Schauble told Italian newspaper La Repubblica.

    'Booze and Women'

    Macron, on the other hand, wants to create a common eurozone fund — separate from the ESM — effectively meaning that richer eurozone members — such as Germany — would be forced to support poorer nations, such as the southern states which are all struggling to remain within strict guidelines on national debt and deficits.

    Greek anti-austerity protesters
    © Flickr / Des Byrne
    Greek anti-austerity protesters

    "We will propose creating a budget for the eurozone with three functions (investments for the future, emergency financial assistance, and response to economic crises). Access to this budget will be conditional on the respect of common tax and social rules," Macron said in his election manifesto.

    The nuanced differences between what Macron and Schauble are a further sign of dissent within the Eurozone, which is still reeling from comments made by eurogroup chief Jeroen Dijsselbloem, who accused the Mediterranean eurozone members of spending money on "booze and women" instead of cutting public spending and reducing debt. 

    The division within the eurozone was further exemplified when Spanish Prime Minister Mariano Rajoy, April 10, hosted a mini-summit with the leaders of France, Italy, Portugal, Greece, Cyprus and Malta to discuss common concerns over the single currency as well as the migrant crisis.


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    single currency, French 2017 election, bailout package, austerity measures, European Union, European Central Bank, Emmanuel Macron, Jeroen Dijsselbloem, Wolfgang Schauble, Italy, Europe, Malta, Cyprus, Portugal, France, Greece
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