Hopes dashed
The EU Commission and France’s President Macron waited for months for Germany to form a government in the hope of finally being able to tackle European Monetary Union. However, at the EU summit at the end of March, Chancellor Merkel put her foot firmly on the brakes. The summit failed to produce a tangible result and this has now jeopardised the timetable for the possible transformation of monetary union. EU Finance Ministers will try to achieve minimal consensus by June about the proposals for “completion” of banking union that are already on the table but a large number of EU countries, including Germany, still have problems with the planned measures for the mutualisation of banking risks and entering into a common deposit guarantee scheme. Not to mention the fact that the European Parliament, which has co-decision-making powers, has not even started discussions on the backstop for the baking union. The lengthy process of forming a government in Germany thus already seems to be having ramifications for the EU. It looks as though the goal of finalising the banking union by the beginning of 2019 might as well be forgotten. |
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With the creation of an EU Finance Minister, the European Commission wants to improve coordination of economic policy in the EU. With this aim, he will combine three offices into one - EU Commissioner for Economic and Monetary Union, Chair of the Eurogroup and Chair of the Board of Governors of the European Monetary Fund.
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| Cybersecurity – Part 1: ENISA Reform |
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The EU Commission wants to improve cybersecurity in the EU and for this purpose strengthen the cybersecurity agency ENISA. In cep’s view, this is urgently needed. The proposal to give ENISA a permanent mandate and increasing its funding and staff is also appropriate.
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By introducing new support criteria for "combined transport", the EU Commission wants to shift more freight traffic off the roads and onto railways and waterways. In cep's view, this may reduce CO2 emissions, but there is also a risk that inefficiencies will be subsidised.
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| EU-Banking Authority (EBA) |
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The European Commission wants to give the European Banking Authority (EBA) more responsibility for financial supervision. In cep’s view, however, the EBA’s new tasks, to allow for “ecological and social factors” and to promote consumer protection, may lead to a conflict of interest with its actual task - safeguarding financial stability.
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| The EU Commission wants to use a "stabilisation function" to protect Member States, and particularly eurozone countries, from the consequences of an economic shock. For this purpose, it has submitted a Communication which has been taken up by the German grand coalition. Although the stabilisation function reduces the risk of a state having to apply for financial aid, cep nevertheless takes a critical view of the idea.
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“Trade wars are bad and easy to lose.”
Donald Tusk, EU Council President |
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“Businesses that make money by collecting records of private lives were once described as surveillance companies. Their rebranding as ‘social media’ is the most successful deception since the Department of War became the Department of Defence.”
Edward Snowden, Whistleblower |
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“No state that is threatened with bankruptcy will apply for ESM loans if it can obtain enough money from the ‘stabilisation function’ and with no strings attached.”
Prof. Lüder Gerken, President of cep |
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“The EU Finance Minister will have only a little more power than the existing Commissioner for Economic and Monetary Affairs. The extent, to which he is able to influence economic and fiscal policy, will therefore depend primarily on his political skill.”
Dr. Matthias Kullas, Head of Division at cep |
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Facts
According to the Confederation of German Industry (BDI), reducing German greenhouse gas emissions by 80 percent by 2050 would cost € 1.5 billion. |
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