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Germany is pushing for changes to EU treaties “as soon as possible” after the May European elections, in an overhaul to fuse eurozone economic governance behind a budget chief and euro area parliament.
In interviews, speeches and articles, Wolfgang Schäuble, Germany’s finance minister, has given urgency and political impetus to Berlin’s longstanding ideas for a refashioned and more centralised eurozone.
Speaking at the College of Europe in Bruges, Mr Schäuble outlined a vision for a changing EU treaties to establish a “budget commissioner” empowered to use common funds and reject national fiscal plans if they “don’t correspond to the rules”.
Asked when he envisaged agreeing the treaties, he said “today is better than tomorrow” and called for negotiations to start straight after the European parliament elections in May.
These reforms to integrate the eurozone, he added, must be paired with measures to ensure those countries outside are not “systematically disadvantaged” – an approach that will be welcomed by Britain.
In a joint Financial Times article with George Osborne, the UK chancellor, he wrote that future treaty change “must include reform of the governance framework to put euro area integration on a sound legal basis, and guarantee fairness for those EU countries inside the single market but outside the single currency”.
Mr Schäuble’s intervention to restart the reform debate highlights Berlin’s determination that the EU should build on the eurozone’s fragile economic recovery from the financial crisis by creating institutions strong enough to withstand future turmoil.
The veteran finance minister’s pledge to fight for reform comes after the joint declaration in January from German chancellor Angela Merkel and French president François Hollande, pledging to work for closer economic and monetary union.
But the German government has now gone a step further, arguing in the FT that treaty change must also address one of key negotiating demands of Mr Cameron, the UK prime minister, before his planned 2017 referendum: the protection of the interests of euro “outs”.
Mr Schäuble, a long-term advocate of reform, wants to establish an institutional architecture for a common fiscal and economic policy, with a parliament, finance minister and budget to support countries in crisis and encourage reform.
He said it was “nonsense” to suggest the power for a eurozone commissioner to reject national budgets would impinge on sovereignty. “To stick to the rules is not a violation of budget sovereignty . . . of national sovereignty. We have moved sovereignty to the European level,” he said.
Germany’s renewed appetite for treaty reform will rattle some eurozone member states, which fear the centralisation of budget power would potentially trigger national plebiscites that could not be won.
Big gains for more radical, eurosceptic parties in the May elections could undermine efforts by mainstream parties such as Ms Merkel’s CDU to build a political consensus for strengthening the eurozone.
Acknowledging the populist threat in an interview with Handelsblatt, the business daily, Mr Schäuble said that the performance of France’s National Front in the recent local elections and the growth of eurosceptic parties elsewhere was “not a good development”.
But he took comfort from hopes that the Ukraine crisis could boost voter support for European integration, saying: “Europe always advances in a crisis . . . the crisis in Ukraine will make people in Europe more confidence about the value of European integration again, and motivate them to vote. Then the turnout would rise, and the eurosceptic forces would likely perform worse than many fear today.”
The finance minister forecast that the effect of the crisis for the German economy would be “manageable”. As for sanctions, German industry had made clear that if they were imposed it would be ready. “You have to convince Russia with diplomacy and economic pressure. Compliance with the rules and principles is not only in the interests of the west but also Russia.”