November 24, 2017, 12:47 pm
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Euro budget, ESM, banking union stances unresolved

BERLIN- German parties exploring a coalition government remain divided on the issues of a euro zone budget, Europe’s banking union and its ESM bailout fund ahead of a meeting of party leaders later on Friday, according to a draft paper on Europe seen by Reuters.

The 1-1/2 page document, a blueprint for a new German government’s stance on European issues, contains several bracketed sentences, reflecting ongoing areas of disagreement that must be resolved by Chancellor Angela Merkel and other party leaders at their meeting this afternoon.

“We reject [a separate euro zone budget as well as] the introduction of instruments that would lead to automatic transfers or a mutualisation of debt,” one passage reads, reflecting differences over whether to rule out French President Emmanuel Macron’s idea for such a budget.

Macron sent his finance minister, Bruno Le Maire, to Berlin this week to talk with leaders of the German parties and try to persuade them not to reject his ideas for a reform of the euro zone in their coalition agreement.

In addition to Merkel’s conservatives, the Greens and the liberal Free Democrats (FDP) are involved in the talks. The FDP has been particularly critical of Macron’s ideas for a euro zone budget, fearful this would open the door to Germany subsidising economically weak members of the 19-nation single currency bloc.

The paper, which included footnotes spelling out where the different parties stood on the divisive issues, showed a degree of FDP isolation on key European issues. - Reuters
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