French President Emmanuel Macron on Thursday backed Germany’s idea of a European Monetary Fund (EMF) to counter economic shocks in euro zone member states but stressed the ultimate goal of deeper integration should remain a euro zone budget.
Macron wants a giant leap forward in European cooperation, pushing for the creation of a euro zone finance minister and parliament, as well as a stand-alone budget for the currency bloc to cushion economic shocks and head off future crises.
The French leader is running into resistance in Berlin despite conciliatory public signals from German Chancellor Angela Merkel.
Her finance minister has proposed transforming the euro zone’s rescue fund, the European Stability Mechanism (ESM), into a fully fledged EMF that would have more powers to support vulnerable member states.
“We should head towards a European Monetary Fund but this should in no way be mixed up with a (euro zone) budget,” Macron said during a visit to Athens.
Europe’s single currency area is emerging from the near decade-long economic and financial crisis that almost ripped it apart. But Macron lamented what he called a “kind of civil war” over differences within the currency union.
Macron praised Greece’s austerity reforms but said ordinary Greeks had paid a heavy price and reiterated his call for an easing of the country’s debt burden.
Greek President Prokopis Pavlopoulos said Greece supported France’s proposals for a closer euro zone. He said the ESM should be reformed and replace the International Monetary Fund (IMF) in Europe.
“We respect the IMF, but we can manage better with an organization which was set up to have a European mentality and understand the euro zone’s special features,” Pavlopoulos told Macron.
Euro zone governments in June approved another 11th-hour credit line for Greece worth nearly $10 billion (£9.15 billion) after the IMF said it would in principle join the country’s current bailout, having hesitated for two years.
Macron helped bridge differences between the fund and some euro zone member states, including Germany.
Echoing Pavlopoulos, Macron urged Europe to carry out reforms that would restore its independence in dealing with economic shocks like the Greek debt crisis.
“I consider that the IMF should not have had a role to play in European affairs and therefore I want Europe to regain its full independence in that regard,” Macron said.
Source: Reuters (Reporting by Michel Rose and Renee Maltezou; Writing by Richard Lough; Editing by Andrew Roche)