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Germany must decide: budget rigour or Europe's future

[May 15, 2017] BERLIN (Reuters) - After Emmanuel Macron's victory in France's presidential election, Germany must decide whether it wants to continue its single-minded focus on budget rigour or work with him to ensure the future of the European project, a German diplomat said.

In an interview with Reuters hours before the new French president travels to Berlin to meet Chancellor Angela Merkel, Wolfgang Ischinger, chairman of the Munich Security Conference, pushed back against German politicians who have picked holes in Macron's ideas for Europe since his election win.

Among those are Finance Minister Wolfgang Schaeuble, who has come to personify Berlin's focus on the "Schwarze Null", or balanced budget. He has suggested Macron's plans to create a budget and finance minister for the euro zone are unrealistic.

"My wish is that this issue is not used in the (German) election campaign, but that we have a serious discussion over the question: 'What is more important to us? The Schwarze Null as a categoric imperative or the future of Europe?'" Ischinger said.

"If compromises are necessary and make sense, then I would support compromise rather than categorical imperatives."

Mainstream parties in Germany applauded Macron's victory over far-right leader Marine Le Pen earlier this month.

But since then, conservative politicians and media have criticized his plans, suggesting they would lead to a "transfer union" in which German money would be used to pay for uncompetitive member states that are reluctant to reform.

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Wolfgang Ischinger, chairman of the Munich Security Conference, during Reuters interview in Berlin, Germany, May 15, 2017. REUTERS/Reinhard Krause

Schaeuble has suggested some of Macron's more ambitious plans would require politically thorny changes to the EU treaty.

But Ischinger, a former German ambassador to Britain and the United States, said much could be done on an intergovernmental basis.

"People have been talking for quite some time about the idea of a euro zone or EU finance minister," Ischinger said.

"This could be the subject of a German-French initiative that incorporates the idea of an emergency rescue fund for struggling euro zone member states," he said.

Ischinger also urged France and Germany to press ahead with closer military cooperation, saying Germany and France could agree to joint defense procurement from a certain date in the future. This would save billions of euros annually, he said.

"It can't happen immediately, it is difficult, it might be painful because of the different industrial interests. But it has to happen," he said.

(Reporting by Noah Barkin and Andreas Rinke; editing by Mark Heinrich)

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