In a guest article for the Frankfurter Allgemeine Zeitung (18 July 2013), Foreign Minister Westerwelle writes that reinforcing the eurozone means a clearer commitment by Europe to the principle of different speeds than was previously the case.
The European debt crisis has taught us how closely our economies and democracies are intertwined. The idea that economic and budgetary policy can remain national issues in a currency union is outdated. Communitization such as with the common currency is not being discussed for fiscal and economic policy. However, tighter cooperation that preserves national sovereignty while giving Brussels more of a say makes good sense in terms of economic policy and is a democratic necessity.
The dilemma is that in Europe 17 countries share a currency, but there are 28 in the Union. How can we move forward given this tension?
That will only be possible if we start thinking in new ways on integration policy. Reinforcing the eurozone means a clearer commitment by Europe to the principle of different speeds than was previously the case.
It is essential to reinforce the eurozone in a way that is not only transparent for all EU member states, but also leaves the doors open to all those who want to or are able to join later. Non‑euro countries should be informed of the decision processes and be able to participate wherever possible.
The challenge is to strengthen Europe’s ability to act without promoting a division of the Union. It is a question of the right balance. Europe has always been a project that tears down walls and fills in trenches, after 1945 just as after 1989. Europe has always emerged from crises stronger that it was before.
What are the next steps?
- We need further professionalization of eurozone structures. The Eurogroup already has a permanent president. Federal Chancellor Merkel and President Hollande proposed a full-time President of the Eurogroup with appropriate support. In this point, it is important to avoid redundancy or competition with the commission. Some are considering building up a large apparatus, but I would warn against such parallel structures in the eurozone. The commission is and will remain the guardian of the Treaties and the advocate of Europe’s interests as a whole. Its role may not be undermined.
- Integration and legitimation are two sides of the same coin. The European Parliament must be as closely involved in reinforcing the economic union as possible. The idea of a separate eurozone parliament could however promote a division between euro and non‑euro countries. There is thus much to be said in favour of the suggestion by the Future of Europe Group of Foreign Ministers to create dedicated euro structures within the European Parliament in order to be able to adequately legitimize eurozone decisions. All members of the European Parliament should be informed of the developments in the eurozone, but only members from eurozone countries should vote on the measures.
- As for the Parliament, parallel constructions must also be avoided for the budget. The proposal that the eurozone should have its own budget is problematic. Instead, a fund could be set up from which countries could receive financial incentives for reforms that are in the overall interest of the eurozone. The recipient country would have to make a binding commitment to implementing the agreed reforms. In contrast to a budget established for the long term, such a fund would be temporary and would provide early and structural crisis prevention.
- In a reinforced economic union, cooperation must be expanded beyond financial policy to other fields of economic, fiscal, social and education policy. The various ministers should also regularly meet in a eurozone format to coordinate their policies more closely. This must stay within its limits, however, when it comes to areas where fundamental interests of the other EU member states are affected, such as the common market.
- The right consequences must be drawn from experiences with aid programmes. To help the euro countries that have massive financial problems, the European Stability Mechanism (ESM), should, in the long term, develop into a European monetary fund. This would have to have a comprehensive range of instruments at its disposal from analysis capabilities to the implementation of debt rescheduling and reform programmes to an insolvency system for countries.
All 28 of us must together make the important decisions for the future of Europe. The Union will thus only preserve its fundamental values by working together – and together with several Foreign Ministers I have proposed an improved mechanism for this.
At the same time we must now make the economic and financial policy decisions needed to reinforce the eurozone if we want to prevent new crises and increase Europe’s weight in the world. This must all be as transparent and open as possible to all members of the European Union.
We must always have an eye on the part, but also on the whole.