Wednesday , October 27 2021

France-Germany for a common budget in the euro area. | International economy



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Germany and France will propose Monday at the Eurogroup meeting to set up a special budget for the euro area countries. The proposal concerns Greece directly because the budget's goal is to prevent economic crises, but also to reduce the economic disparities between the 19 euro countries. This budget, for example, can finance investments in depressed areas in the euro area.

According to reports from the German press, the French-German finance minister Bruno Le Méri and All-Salts are following the long-term agreement reached after many months of negotiations that the euro area budget concerns only their Member States, but it will also be included in the EU budget. This will ensure that the budget is compatible with the EU's stability criteria. Berlin insists on this regulation.

Dutch reservations

The French-German proposal also provides that the Member States will have the right to submit financial programs each year within the framework of the "strategic specifications" of Heads of State and Government and Eurogroup. The financing decision is also taken with the Commission's agreement. Only countries that meet the EU's stability criteria will be eligible. Countries that do not respect them, such as Italy today, will be ruled out.

Berlin and Paris have not yet reached the size of the budget. A few months ago, French finance minister Bruno Le Mer spoke about 25 billion euros. This corresponds to 0.2% of GDP in the 19 euro area Member States. According to press reports, the Commission has already given a green light to the French-German proposal. But countries like the Netherlands have reservations. But the question is what attitude they will observe on Monday on the Eurogroup.

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