Was it “Hour of Truth”, as French President Emmanuel Macron put it? The great reform that monetary union puts on a viable foundation for all time?
Certainly not – and that’s good.
What Macron has decided toger with Angela Merkel is a compromise. Macron wanted a euro budget with a volume of several hundred billion euros. Merkel did not want a euro budget at all. Result: There is a euro budget with a volume of, presumably, a low double-digit billion dollar amount.
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Macron wanted more money to support countries that get into financial difficulties. Merkel wanted to make national budgets more rigorously controlled. The result: In future, ESM crisis fund will provide a little more money for countries in need, while at same time controlling budgets more rigorously.
The eurozone will not become a super-state
So monetary union is getting a few additional instruments to help Member States to fight crises – especially in case of crises that individual countries have to deal with and against which European Central Bank cannot do much, because To align its interest rate policy with economic situation in monetary union as a whole. For such cases, ESM is in future.
But eurozone is not being converted into a transfer union, and certainly not a kind of super-state. It remains a group of comparatively independent nations, which have only given part of ir national sovereignty and can refore only claim to be entitled to assistance from community coffers. This has obviously not yet been discussed in CSU, orwise indignation about decisions of Meseberg cannot be explained.
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Anyone who believes that euro can only be saved if eurozone countries make a quantum leap towards political union will be disappointed by this result. But more is not possible at moment, and that is not only due to Germany. Even Dutch, Estonians or Austrians are not ready for far-reaching reforms.
Macron has become clear in recent weeks. It is a sign of political wisdom that he has drawn right lessons from it and has not insisted on his original ambitious agenda. The attempt to implement such an agenda would have brought about final split under current political conditions. The only ones who would have triumphed would have been Donald Trump and Vladimir Putin.
It is said that politics is art of possible. Merkel and Macron have done what is currently possible. More is not happening at moment.
