Last week there were reports of French Economy Minister Emmanuel Macron´s proposals for more eurozone integration. His ideas entail a specific eurozone Commissioner, responsible for a eurozone budget that would serve as a way of fiscal transfer inside the eurozone. Many economists agree that the eurozone is lacking such a mechanism in a robust form (the stability fund ESM is only an emergency measure). German representatives, however, reacted to the ideas with caution. Industry Minister Sigmar Gabriel and Finance Minister Wolfgang Schauble were among the more pessimistic. According to them, the ideas have several problems. Firstly, the eurozone budget would have to be constructed somehow. And Germany is firmly against any form of “euro tax”. Also, fiscal transfers could have a comforting effect on some eurozone countries (France was not specifically named, but the idea was made clear) in their reform effort – having the buffer of fiscal transfers, the incentive to reform would be undermined. Current rules need to be fully implemented and enforced firstly (France is still in Excessive Deficit Procedure, having been given a prolongation to get its budget in line twice already). On the other hand, Chancellor Angela Merkel was more optimistic about the ideas. She said that the eurozone clearly needs to move forward and all ideas are worthy of discussion.

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