Finance Minister pushes for EU fiscal union

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16 Oct, 2012 Updated Tue 16 Oct 2012 17:59 CEST
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The German government is willing to compromise when it comes to solving Greece's debt woes, but in exchange for that cooperation Berlin is demanding more fiscal integration through EU treaty reform, a report said on Tuesday.

According to the Handelsblatt newspaper, Chancellor Angela Merkel and Finance Minister Wolfgang Schäuble want their European partners to embrace the idea of a "fiscal union."

On his return from a five-day trip to Asia, Schäuble said it was time to take "bigger steps" in that direction - which would also entail "changing European treaties in one place or another."

The finance minister's call comes just ahead of a key EU summit set to start on Thursday.

During his visit to Singapore, Schäuble dismissed speculation of a Greek exit from the eurozone, saying he did not believe Athens would go bankrupt.

Yet preliminary estimates by the "troika" of Greece's international creditors - the European Commission, European Central Bank and International Monetary Fund - point to a grim picture.

Last month, news magazine Der Spiegel said troika experts estimated that Athens was facing a budget shortfall of about €20 billion.

Handelsblatt said Berlin was prepared to work toward a solution on the Greek issue - but EU treaty reform would be the price Germany demanded for those efforts.

More than anything, the German finance minister is looking to give a European currency commissioner the power to reject budget plans that conceivably violate the EU fiscal pact - and force those countries to go back to the drawing board.

Under current rules, the EU Commissioner for Economic and Monetary Affairs, Olli Rehn, can only recommend that a country rework its budget with other EU commissioners' backing. Schäuble wants the bloc's money chief to have more authority - though a country's legislature would decide whether to address the budget shortfall through tax hikes or savings.

But a spokeswoman for European Commission President José Manuel Barroso said Tuesday that Rehn already plays an important role and enjoys "much respect."

The Local/DPA/arp



2012/10/16 17:59

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