The Eurozone gets its own budget
The Eurozone finance ministers have agreed on the key points of a future Eurozone budget, but the compromise hardly differs from the general decisions that the Eurogroup had already reached at the end of last year. The details of the financing of the budget and its total amount have yet to be decided. Can this reform stabilise the monetary union?
A needless fund
The agreed framework for the Eurozone budget is questionable, the Neue Zürcher Zeitung concludes:
“The ministers have specified the purpose of the entire budget for the Eurozone. It is supposed to be accessible - on a voluntary basis - to candidates for Eurozone membership and provide them with subsidies to support them in implementing structural reforms and with investments. The goal is to boost competitiveness and the convergence of these states. The considerable gaps between individual members of the monetary union in terms of prosperity and competitiveness are indeed a source of tension. But big fat funds already exist to help poorer states and regions catch up with the richer ones, not just in the Eurozone but in the entire EU.”
A budget minus the money
A paltry result indeed, comments EU correspondent Eric Bonse in taz's blog:
“It's limited to a 'term sheet' that establishes a few basic principles. According to that, the budget should no longer be used to stabilise the Eurozone, as initially planned. Instead the aim now is to focus on competitiveness and convergence - or in other words on neo-liberal reforms. ... Things are taking a turn for the absurd, however, regarding financing. Because this has still not been secured. The Netherlands and other members of the 'Hanseatic League' want to prevent too much money from flowing into the new budget - and for that reason are blocking any agreement whatsover. The result: a Eurozone budget without money, which will only be an appendage - if that - to the EU's seven-year Multiannual Financial Framework, which in turn is set to be decided in the second-half of 2020 under the German EU Council presidency - so in Berlin.”
Devoid of microeconomic significance
In an interview with Atlantico, economist Rémi Bourgeot is less enthusiastic about the budget:
“It's hard to see anything new in the announcement, and the modest sum of the final amount could be the source of a certain embarrassment. Of course, one can imagine that a power struggle could result in an amount exceeding the 17 billion euros that is currently being talked of - twice that amount even. But one must bear in mind that such sums have no macroeconomic significance for the Eurozone.”
Good news for the weakest countries
El País notes approvingly that the EU is capable of acting even without being under acute pressure to do so:
“Despite all the negative predictions Europe is still able to advance, albeit very slowly. It has shown that it can take decisions and design projects even when it's not on a cliff edge. ... The Eurozone budget will be a vital instrument once it comes into force because it will help to cushion the impact of the next major crisis, which will come sooner or later. Even if the implementation takes a while and its initial dimensions are relatively modest, it will above all help the most vulnerable countries.”