The EU tries to save the reform of the euro to avoid future crises | Economy

The EU tries to save the reform of the euro to avoid future crises | Economy

The 19 European countries who share currency They try to save the furniture in the reform of the euro. Those more ambitious nations intend to tie agreements to strengthen the architecture of the Banking Union and keep alive the proposal of a budget for the euro zone and especially the deposit guarantee fund. The pulse of Italy has revived the reluctance of the defenders of a strict fiscal discipline. To prevent them from becoming entrenched, work has been accelerated with the aim of reducing banking risks. The finance ministers will try to approve the measures this week.

A debate is starting in Brussels today, which, as a senior community official says, will be "long and intense". At stake is the reform of the euro that in July the leaders of the EU decided to postpone until the end of the year. And again, the bet of French president Emmanuel Macron to give a boost to the euro so that it does not explode in the next crisis will face the arduous resistance of the countries of the north and the doubts of Germany.

Last weekend the Nineteen were still trying to reach the very complex condition that paralyzes so many folders: consensus. Community sources explain that there is create a firewall that comes into operation in the event of a bank failure. But there ends the unanimity necessary for the reforms. And taking that measure alone to the next Euro Summit would be a resounding failure for Macron, who would not have measures to sell his electorate in the May elections.

The euro partners agree that it should strengthen the rescue fund (ESM) and turn it into a sort of Monetary Fund for the EU that can dispense precautionary funds for countries in distress. It is, for example, that if a country suffers an unaffordable increase in its risk premium due to the contagion effect from another economy, it can request those temporary loans.

Resistances of the north

The countries of the so-called New Hanseatic League, led by the Netherlands and formed by the Nordic and Baltic countries, demand that any assistance be done with a strict "conditionality" and ask to give more competences for the ESM. In the case of debt restructurings, they also demand clauses for collective action, which consist of a majority of bondholders being able to agree on conditions that are applicable to the rest. France has accepted this last point, but together with countries such as Spain or Italy it refuses to impose such strict conditions so as not to stigmatize a member with problems in front of the markets.

Tense debate around
to the 'Google rate'

Together with the budget of the euro zone, the so-called Google rate it is the other great bet of the French Government. And the negotiations of the last few days have not yet convinced the four countries that are radically opposed to it if it is not adopted globally: Ireland, Sweden, Denmark and Finland.

According to community sources, Austria – which has the rotating presidency of the EU – has made a new offer: apply it from 2022 if the OECD in these years fails to reach an agreement. However, these countries argue that with this rate on turnover could be taxing companies at a loss, which would be a brake on innovation in Europe.

On the other hand, France, Spain or the United Kingdom do not admit that the technological giants manage to continue dodging the national treasuries. In fact, 11 countries have decided to implement it unilaterally.

From then on, there are major disagreements: the budget of the euro zone and the deposit guarantee fund. The Nineteen already have a technical formula by which, at the moment, national funds could lend money between them and then continue to move forward. But Germany has put the brake. "It is with assisted breathing", say community sources. Diplomatic sources confirm it. The most optimistic believe that while the project is on the road map, it is still alive. The most pessimistic people consider him dead.

Italy's challenge to the EU rules and its refusal to limit the sovereign debt in the hands of the national bank has made Germany have decided that it is the last of its priorities. Its Finance Minister, Olaf Scholz, expressed it this way on Wednesday: "A common deposit guarantee fund is at the end of the road". And he warned: "And the road to that goal is long and full of conditions."

Germany has been claiming that before sharing risks, they must be reduced. The latest data from the Commission indicate that these continue to be reduced: delinquency continues to fall and countries such as Spain have virtually left the radar. "They have no excuse," say diplomatic sources. To get the fund out of the UCI, the work of the so-called banking package has accelerated, which, according to the papers that EL PAÍS has had access to, includes the criteria in case of insolvency, measures to help banks with high levels of delinquency or against money laundering.

The great bet of the Franco-German axis is, however, the budget of the euro zone. At the moment, it is limited to investments, but France is willing to explore the European unemployment insurance in which Spain insists and which divides the Government of Angela Merkel. That will be the heart of the discussion this week. The abyss between the countries of the north and the rest opens a word: "stabilization." The most orthodox states think that this would discourage the south to carry out reforms. For France, it is a workhorse, since it believes that only a community mechanism would prevent countries with limited fiscal margin from collapsing in the next crisis. In other words: disaster.


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