Northern EU nations warn against radical eurozone reform

Northern EU nations warn against radical eurozone reform

The Hague (AFP) – Eight northern European countries, led by eurozone heavyweight the Netherlands, have joined forces to call for strengthening economic stability and cautioning against “far-reaching proposals”.

“We believe discussions about the future of the EMU should take place in an inclusive format” including nations not in the eurozone, said a joint document, in an implied broadside at French President Emmanuel Macron.

Finance ministers from Denmark, Estonia, Finland, Ireland, Latvia, Lithuania, the Netherlands and Sweden all signed the document on Monday, urging that “unity is a key asset for the remaining EU27 and must be safeguarded.”

Dutch Finance Minister Wopke Hoekstra said all eight nations “believe that strong economies lead to a stronger Europe.”

“This starts at the national level by taking measures to increase economic resilience.”

A stronger economic and monetary union (EMU) “starts with implementing structural reforms and respecting the Stability and Growth Pact, thereby building up fiscal buffers in national budgets to allow room for national fiscal policies,” the eight argued in their communique.

The European Union “should make use of the strengthened fiscal, economic and financial frameworks already in place, to deliver concrete results” for all citizens of the 27 nations which will remain in the EU after Britain leaves next year.

As the 19-nation eurozone finally emerges from years of crisis, many capitals believe the region must be buttressed to better weather future economic storms — but not all agree on how best to do it.

Macron has set out an ambitious vision for reforms, including setting up a separate eurozone budget and creating a bloc finance minister.

European Commission head Jean-Claude Juncker has also made overhauling the eurozone a priority.

But without mentioning Macron or France, the eight nations took issue with any over-arching, radical reforms.

“It is of the essence that we do our utmost to strengthen economic and financial stability and regain public trust,” the eight nations argued.

“Further deepening of the EMU should stress real value-added, not far-reaching transfers of competence to the European level.”

Ensuring a “stronger performance on national structural and fiscal policies” and working towards goals such as completing banking union “should have priority over far-reaching proposals,” they insisted.

They also argued that the hastily-assembled European Stability Mechanism (ESM) “should be strengthened and possibly developed into a European Monetary Fund”.

But “decision making should remain firmly in the hands of member states,” they stressed.

Dutch Prime Minister Mark Rutte has long insisted that over-spending countries should embark on structural reforms, resisting any increase in his country’s contributions to the EU coffers.

The Netherlands is the one of the eurozone’s largest economies, and after years of austerity an official government advisory body Tuesday predicted the economy would grow by 3.2 percent this year with the unemployment rate falling to just 3.9 percent, the lowest since 2001.


Please let us know if you're having issues with commenting.