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EU Economic Review - Future Shape of Europe: Macron Vs. the Germans? - by Holger Schmieding

French president Emmanuel Macron travelled to Berlin for serious negotiations about the future shape of Europe. Will he achieve much?

Almost everybody would like to support him, partly to strengthen his hand against his anti-European adversaries at home. But hardly anybody in Berlin seems ready to breach “red lines“ drawn in the past.

Macron probably knows by now that he will have to settle for some modest changes for the time being, with only baby steps to be agreed by the time of the next EU summit on June 28-29, 2018.

Money isn’t the key issue. Germany is ready to spend more and put more of it at risk. But it would come with three key strings attached.

1. Berlin will insist that commitments involving serious amounts of money will remain subject to approval by the German parliament, as is currently the case for support programs of the European Stability Mechanism (ESM). For those who love unwieldy German words, get used to “Parlamentsvorbehalt.“
2. Upon gradually completing the banking union, Germany will insist that each step to share risks comes after a step to reduce risks.
3. Partly because the Eurozone economy is doing fine at the moment and Germany is reluctant to endorse a major change in the governance of the Eurozone, Germany puts significant emphasis on changes for the EU rather than just the Eurozone level. For instance, this means improving controls of external borders (including significantly increasing the funding for FRONTEX), controlling migration and beefing up joint defense projects.

Read more: Macron Vs. the Germans? - The Globalist

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