Merkel aide rejects conservative critique of euro reforms
(Adds comment from ESM managing director)
BERLIN, June 24 (Reuters) - Chancellor Angela Merkel's
agreement with French President Emmanuel Macron on euro zone
reforms does not violate the coalition agreement, as some
Bavarian conservatives have suggested, an aide to the German
Chancellery Minister Helge Braun underscored Germany's
determination to maintain control and avoid turning the euro
zone into a "debt union" in a letter to lawmakers from the
parties in the ruling coalition.
Merkel, locked in an escalating showdown with allies in the
Bavarian Christian Social Union (CSU) over migration, has come
under additional fire from CSU leader Horst Seehofer for not
coordinating her euro zone agreement with his party.
In his June 22 letter, Braun said Merkel's agreement to form
a euro zone budget was in line with budgetary provisions
included in the German coalition agreement signed in February.
"Liability and control, solidarity and responsibility" will
remain key precepts for the euro zone, Braun told lawmakers in
the letter, a copy of which was viewed by Reuters, ahead of a
meeting of the coalition parties on Tuesday.
Braun said former finance minister Wolfgang Schaeuble had
negotiated a road map for a European banking union in June 2016
that requires banks to reduce the risks on their balance sheets
before any broader European system was put in place.
"On the basis of this guideline, we have now agreed with
France to continue working to reduce risks," he said.
Only when these efforts were deemed sufficient would a
credit line be implemented for the European Stability Mechanism
that could be used by the European resolution fund, he said.
ESM Managing Director Klaus Regling also backed the proposed
euro zone budget in an interview with the Sueddeutsche Zeitung
newspaper to be published on Monday, noting the Franco-German
agreement expressly stated that "there will be no transfers."
Braun said Germany had prevailed in its negotiations with
France to ensure that aid to euro zone states should only be
possible under strict conditions, and that the German parliament
would continue to participate in the process.
"Every member state remains responsible for its public
finances and the necessary reforms for growth and
competitiveness," Braun wrote. "We will not allow a debt union."
Finance Minister Olaf Scholz, whose Social Democrats (SPD)
are Merkel's junior coalition partners, last week also defended
the euro zone reform package, but said his party would only back
the deal after it received a detailed accounting of its costs.
(Reporting by Andreas Rinke and Holger Hansen; Writing by
Andrea Shalal; Editing by Toby Chopra and Janet Lawrence)
First Published: 2018-06-24 12:47:05
Updated 2018-06-24 20:16:42
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