Merkel’s conservatives say want stronger euro zone, wary of Macron plans

MURNAU, Germany (Reuters) – Senior members of Chancellor Angela Merkel’s conservative bloc pushed back on Tuesday against criticism that Germany is blocking euro zone reform proposals by French President Emmanuel Macron.

Merkel’s CDU-CSU bloc is opposed to any pooling of debts in Europe, any fiscal policy without national parliamentary control and the European Commission’s proposal for a euro zone finance minister.

But Volker Kauder, leader of the conservatives in the Bundestag lower house of parliament, said the CDU-CSU and their junior coalition partner, the Social Democrats (SPD), had agreed several measures to strengthen European integration.

Both the CDU-CSU and the SPD back bigger German contributions to the European Union budget and developing the euro zone’s rescue fund, the ESM, into a European Monetary Fund controlled by the parliaments of the currency bloc’s members.

“We’ll implement that,” Kauder told reporters at the end of a two-day gathering of the coalition’s parliamentary leaders in the Bavarian mountain resort of Murnau, without providing more details.

In an apparent swipe at Macron’s more ambitious proposals for euro zone reform, Kauder said: “With all due caution, I’d like to say now that not every proposal that is made by a EU member state automatically means a step forward.”

“This has noting to do with being euroskeptic,” he added.

RESISTANCE

The comments highlight the resistance among Merkel’s conservatives to any euro zone reforms that could see more money from German taxpayers being used to fund other member states.

Also speaking to reporters in Murnau after the gathering, SPD leader Andrea Nahles expressed optimism that her party and the CDU-CSU were making progress towards a deal on EU reforms that both blocs in the German coalition could support.

“My impression is that we are on a good path,” she said.

German conservatives are nervous about EU reforms after bleeding support to the anti-euro Alternative for Germany (AfD) party in a national election last September.

Merkel said on Monday that France and Germany agreed on fundamental questions on Europe, but she also admitted that they had some different views on the euro zone.

The coalition partners are trying to reach common ground on several issues, including immigration, taxation and spending as well as on euro zone reforms.

The conservatives and SPD said on Tuesday they would be ready to lower social security contributions instead of cutting taxes to leave working Germans with more money in their pockets after eight years of uninterrupted economic growth.

The German Finance Ministry will announce on Wednesday its tax revenue estimates for 2018-2022 which could show additional room for fiscal spending.

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