German Chancellor Angela Merkel backs the idea of a European Monetary Fund, provided national governments have sufficient oversight, sources close to her said before a visit by the French president.
President Emmanuel Macron, who will meet Merkel in Berlin on Thursday, is pushing hard for bold eurozone reforms to defend the 19-member currency bloc against any repeat of the financial crisis that took hold in 2009 and threatened to tear it apart. His vision includes turning Europe’s existing ESM bailout fund into a European Monetary Fund (EMF).
At one point, Macron also suggested the zone should have its own budget worth hundreds of billions of euros, an idea that does not sit well with Germany.
Merkel told lawmakers from her conservative bloc on Tuesday that she favored the EMF conept as long as member-states retain scrutiny over the body, participants at the meeting said.
“It’s not that one side is putting the brakes on and the other pushing ahead,” one of the participants at Tuesday’s meeting said. “We want to find a good reform path together.”
German conservatives worry that an EMF could fall under the purview of the European Commission and could use German taxpayers’ money to fund profligate states. They also fear the Bundestag, Germany’s lower house of parliament, would lose its ability to veto eurozone aid packages.
A succession of bailouts for Greece aroused stiff opposition in Germany, although the Bundestag approved them all. Merkel told the meeting that an EMF should be incorporated into European law via a change in the EU treaty, though she did not make this a stipulation for creating it, participants said. [Reuters]