January 20, 2010
Since the introduction of the common currency, the 16 member countries, that have presently adopted the Euro, form an informal group within the EU institutional framework where they discuss their specific concerns on monetary and fiscal policies. This has often been very useful. The Lisbon Treaty has therefore formally confirmed the Euro group.
Backed by this innovation, Jean-Claude Juncker, its just reconfirmed chairman, has launched three initiatives to enhance the standing of the Euro-group:
· A secretariat,
· A seat in the G 20,
· The possibility for several or all member states to emit Eurobonds.
None of these three initiatives seems very attractive. None of them would help to advance the EU policy-wise.
First, the Euro-group should not try to turn into “bureaucratic machinery” within the EU. It is not meant to prepare policy papers or adopt formal decisions. By 2020 almost all EU countries, with the possible exception of the UK, should be expected to have introduced the Euro. That should remain the overriding objective of the EU. A Secretariat would give undue importance to an “institution” that should disappear as soon as possible.
Second, the idea of giving the Euro group a status in the G 20 is even more abstruse. The G 20 mission is much broader than monetary or fiscal policy. To the annoyance of other members Europe disposes already of five seats at the G 20 (ECB/Commission, France, Germany, Italy, and UK). When issues of money and finance are discussed in the G 20 the ECB president and the Commissioner for Economics and Finance are the best placed to defend the interests of EU member inside and outside the eurozone. It is strategically much more important to fight for a single EU seats than spoil any energy for an additional seat for the eurozone, which will not be appreciated by our partners.
Thirdly, the suggestion for several Euro group countries to jointly emit bonds does not seem be more acceptable. Certainly, it would make sense for countries with a weak credit rating. But why should a country with AAA rating join hands with a BBB country to obtain funding in the European bond market?
In conclusion, Jean-Claude Juncker has done excellent work for the EU in the past. He should continue to do so in future, but beware of overstepping his limits.
Brussels, 18.01. 10 Eberhard RheinAuthor : Eberhard Rhein