Eurozone reform hits roadblock as German conservatives oppose key proposals

Eurozone reform hits roadblock as German conservatives oppose key proposals

France’s Emmanuel Macron will meet Chancellor Angela Merkel in Berlin today to discuss Eurozone reform. The meeting comes as Ms

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Photo: Reuters/Christophe Petit

France’s Emmanuel Macron will meet Chancellor Angela Merkel in Berlin today to discuss Eurozone reform.

The meeting comes as Ms Merkel’s conservative CDU bloc rejects a key tenet of Eurozone reform that Paris strongly supports. Macron wants the initiative, labelled the European Monetary Fund (EMF), to be the new rescue fund in any future Euro financial crisis and to act on its own authority. Merkel agrees with Macron but is hamstrung by her party’s reluctance to back any proposal that could lead to a Greece-style bailout that German taxpayers footed most of the bill.

Rejection risks putting Merkel at odds with the her Europhile French counterpart, thus strengthening the Eurosceptic bloc within the EU. Expect both leaders to put on a united front; however, Macron is likely to survey future options for moving reforms forward in the face of German parliamentary opposition. Chief among them is leaving the Eurozone reform on the backburner and revisit it once other areas of EU integration, such as defence, energy, migration, digital, are dealt with first. The aim is to win over public support on those other fronts and eventually gaining voter trust in the idea of an EMF and wider Eurozone reform.