France confident of progress toward euro zone budget with Germany: Elysee adviser

PARIS (Reuters) – France is optimistic that it can reach an agreement with Germany on a common approach on proposals for a euro zone budget by June, an adviser to French President Emmanuel Macron said on Tuesday.

Since coming to power a year ago, Macron has made euro zone reform a priority, but his ability to deliver depends on reaching agreement with Germany on the best way forward and then convincing all euro zone member states to back the ideas.

“Our conversations with Germany lead us to be more confident than not,” the adviser told reporters.

When he first laid out his ideas for the euro zone, Macron talked about creating a sizeable separate budget for the 19 countries that share the single currency, appointing a single finance minister and converting the bloc’s emergency rescue fund into something more akin to a European monetary fund.

German Chancellor Angela Merkel has praised Macron for his ideas, but poured cold water on several of the proposals, especially those that may result in Germany sharing more risk.

In a speech in Aachen, Germany, last week, Macron urged Merkel to be bold and drop her “fetish” for fiscal conservatism, which he suggested was standing in the way of progress in Europe.

The Elysee adviser said France was confident that it could also reach agreement with Germany on plans for banking union and a stabilization fund for the euro zone by June, when EU leaders meet for their next summit in Brussels.

The proposal for a single finance minister for the euro zone has effectively been dropped for now, although Macron maintains that it will be necessary in the future as the currency bloc becomes ever more integrated.

While it may be possible for Germany and France to agree a joint position on a budget and a stabilization fund, they would still face an uphill battle to convince other euro zone member states that the proposals are worth backing.

The Netherlands, Finland and several other EU and euro zone countries have already expressed reservations about some of Macron’s plans, saying they go too far and are unnecessary for now.

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