Germany steps up call for currency commissioner

Wed, Oct 17, 2012, 01:00

GERMANY IS stepping up its calls for closer European integration with a demand for a “currency commissioner” with powers to oversee and veto national budgets.

Ahead of this week’s EU summit, finance minister Wolfgang Schäuble told German journalists yesterday the European Parliament should be reformed to restrict MEPs to voting on issues that affect their home countries.

“We must now make bigger steps in the direction of a fiscal union, we must use this chance,” said Mr Schäuble.

The proposal is not new but the timing, days before the first EU summit after the summer break, is significant.

According to a German source, Mr Schäuble informed other euro zone members and key EU officials before going public with the proposal. Mr Schäuble said his preference was for a currency commissioner with powers to intervene and, if necessary, veto national budgets that do not meet EU fiscal rules.

The Berlin idea would see the existing European commissioner for economic and currency affairs be upgraded to have similar powers to the existing EU competition commissioner.

This commissioner’s office, which Mr Schäuble said is “feared around the world”, can act unilaterally on competition issues – something it has done to some effect in recent years.

Mr Schäuble hopes such an upgraded currency commissioner would be freed from current political horse-trading. However he left open whether he believed the commissioner should have the power to impose fines.

Germany would like to see the new commissioner with powers to order a new budget draft from a member state if the deficit it contained was higher than EU rules allow. Member states would retain control over whether to make spending cuts or agree extra revenue-raising measures.

Under current rules, the European Commission makes non-binding resolutions on how member states can change their budgets.

Mr Schäuble’s proposal is likely to form part of Berlin’s renewed push for a new European convention to work on a new treaty – a prospect viewed with little enthusiasm in many EU member states, including Ireland.

Meanwhile, Chancellor Angela Merkel told German business heads yesterday that EU leaders would discuss the “harmonisation of competitiveness” at Thursday’s summit.

The German leader said a lack of competitiveness continued to hobble the euro zone and contributed to high levels of debt in some states.

She said that economic reforms introduced in Greece were beginning to bear fruit and that she sensed a “change in thinking” in Athens about its economic problems.