Germany to discuss harmonisation

Germany is open to a discussion over whether eurozone countries should harmonise their fiscal policy, German finance minister…

Germany is open to a discussion over whether eurozone countries should harmonise their fiscal policy, German finance minister Wolfgang Schaeuble has said.

In an interview published today in Bild am Sonntag newspaper, Mr Schaeuble said the decision made at the euro's creation to not integrate state finances into a European framework could be addressed anew.

"The basic decision was for fiscal and budgetary policy to be decided on the national level. If that is to be changed, then we can talk about it," he said. Berlin has opposed calls by Spain and other countries to move towards a full-fledged "fiscal union" in the 16-nation bloc but appeared last week to have agreed to a limited form of policy coordination.

Looking forward, Mr Schaeuble predicted that member states of the European Union would come ever closer politically.

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"In ten years we will have a structure that corresponds much stronger to what one describes as political union," he said.

Mr Schaeuble said the euro currency was here to stay, and warned those betting against its survival that they are making a mistake.

European leaders meet next week to discuss ways to solve a euro zone debt crisis which has triggered bailouts for Greece and Ireland and which analysts say could engulf other countries. They are expected to agree the terms of a permanent rescue mechanism for the bloc.

Germany and France have pledged to better align their tax and labour policies to foster convergence in the euro zone, but have rejected calls for an increase in the bloc's rescue fund and joint sovereign bonds.

Pressure on high-deficit euro members eased slightly over the past week after the European Central Bank bought government bonds in a thin end-of-year market, pushing down the borrowing costs of countries on Europe's southern periphery.