BRUSSELS, May 2 — The EU’s latest budget proposal handed French President Emmanuel Macron a small victory today by including a watered down version of the young leader’s idea of a eurozone budget.
The European Commission, the EU’s executive arm, unveiled its massive €1.279 trillion (RM6,031 trillion) budget for the next seven years with several innovations including cuts on farm spending and funding for countries that fail to respect democratic standards.
Also included was a eurozone stabilisation fund inspired by Macron, earmarked at a small €30 billion euros, that would help members of the 19-country single currency maintain investment during an economic rough patch.
The commission also included eurozone reform support that would amount to €25 billion to encourage reforms by eurozone countries as well as countries that want to join the euro.
“As a shock-absorbing mechanism, the European Investment Stabilisation Function will complement existing instruments at national and European level,” the commission said in a statement.
“To be effective, it should kick in automatically in the event of large asymmetric shocks, subject to clear eligibility criteria and a triggering mechanism determined in advance, in line with the principles of sound financial and macroeconomic policy,” it said.
The highly technical—and cautious—proposal is a far cry from the ambitions set forth by Macron in a landmark speech in September.
Macron urged a major reform drive to reinvigorate the EU at a time of rising populist challenges, with proposals including a common eurozone finance minister and budget.
But key EU player Germany is reluctant to embark on such deep reform that would likely require changing the treaties that govern the union -- a treacherous political exercise that would require national referendums.
Instead members states are mainly focused on deepening the bloc’s banking union, with hopes to formally launch a European-wide deposit-insurance scheme that would be implemented over the long-term.
Those proposals will be discussed by EU leaders at a summit in June. — AFP
