Berlin says that the German-French agreement on Eurozone reforms is not a violation of the German coalition agreement as a few Bavarian conservative politicians have hinted. Chancellery Minister Helge Braun said that Germany was determined to keep control and avoid turning the single currency area into a “debt union”.
Chancellor Merkel that is tied up in an escalating row with allies in the Bavarian Christian Social Union (CSU) over migration has been criticized for not coordinating a deal over the Eurozone. Mr. Braun said earlier in June that Ms. Merkel’s agreement to create a euro zone budget was in line with budgetary provisions included in the Germany coalition signed earlier this year. “Liability and control, solidarity and responsibility” will still be key precepts for the euro zone, Mr. Braun commented.
Mr. Braun further pointed out that former finance minister Wolfgang Schaeuble had negotiated a road map for a European banking union in June 2016 that requires banks to reduce the risks on their balance sheets before a Europe-wide system is implemented. “On the basis of this guideline, we have now agreed with France to continue working to reduce risks,” he said.
Mr. Braun also added that Germany took the lead in prevailing in its negotiations with France to make sure that aid to Eurozone states should only be possible under strict conditions and that the German Parliament would keep on participating in the process. “Every member state remains responsible for its public finances and the necessary reforms for growth and competitiveness,” Mr. Braun summed up. “We will not allow a debt union.”