Berlin visit

French Hopeful Macron: Euro Zone Needs Own Budget

  • Why it matters

    Why it matters

    Emmanuel Macron is a rising star in French politics and an outside chance of winning the Elysee Palace during elections in May. Should he win, Germany may come under new pressure to stabilize the euro’s finances.

  • Facts

    Facts

    • Mr. Macron, a former investment banker, said the 19 euro-zone nations should contribute to a separate budget for the area, financed by common debt, to pay for needed structural reforms.
    • Mr. Macron by one poll has recently surpassed right-wing candidate Marine Le Pen in polling ahead of France’s elections in April and May.
    • Mr. Macron was France’s economics minister in the Socialist cabinet of Francois Hollande but is running for president this year as an independent.
  • Audio

    Audio

  • Pdf
Macron candidate for the 2017 French presidential visits a qualification class for refugees of German railway operator Deutsche Bahn in Berlin
Emmanuel Macron, the former French economics minister and independent candidate for president, spoke out in favor of a euro-zone budget during a visit to Berlin on Tuesday. Source: Reuters / Fabrizio Bensch

The 19 nations of the euro single currency zone should create a separate budget, financed by commonly-issued debt, to stabilize the currency and pay for needed structural reforms, Emmanuel Macron, the former French finance minister and independent candidate for president, said Tuesday.

During a visit to Berlin, Mr. Macron, a former Socialist Party member of François Hollande’s cabinet and a rising star on the French political scene, called for a special funding entity to be created for the currency, which has been wracked by economic crises in Greece, Spain, Italy and other parts of southern Europe.

Euro-Zone Proposal

Video: French Presidential Hopeful in Berlin

In a visit to Berlin on Tuesday, former French economics minister Emmanuel Macron called for creation of a special euro-zone budget financed by common debt of its 19 member countries.

After meeting with French expatriate voters living in Germany in a hotel at Berlin’s central Alexanderplatz square, Mr. Macron, a charismatic former investment banker at Rothschild said he would seek special status for the euro zone should he be elected as France’s next president in May.

“Today the euro zone has a problem, especially when I compare it to the U.S. and China,” Mr. Macron said to his supporters. “Its level of public and private investment is insufficient and it needs a real stimulus. It would be a huge mistake not to do this.”

“Today the euro zone has a problem, especially when I compare it to the U.S. and China. Its level of public and private investment is insufficient and it needs a real stimulus.”

Emmanuel Macron, Independent French presidential candidate, former economics minister

The former economics minister said that to put the euro back on a stable, prosperous track, the currency zone needs money and investment from its members.

“The key is that the euro zone can decide on that stimulus,” he said. “And thus to have an investment policy that goes through common euro-zone debt for new projects and a euro-zone budget that is the basis for decision-making.”

Polls show that Mr. Macron is gaining favor among French voters ahead of two-stage elections that are set to begin in late April. The conservative nominee, former prime minister François Fillon, is leading among French voters ahead of Marine Le Pen, the leader of France’s Front National party.

Mr. Macron, in one recent poll, was shown to have overtaken Ms. Le Pen, whose popularity has grown amid her hard line against immigration, globalization and the euro, which she promises to take France out of.

Macron, candidate for the 2017 French presidential election, smiles during a visit to a qualification class for refugees of German railway operator Deutsche Bahn in Berlin
French presidential candidate Emmanuel Macron on Tuesday meeting with refugees employed by Deutsche Bahn at a training center in Berlin. Source: Reuters / Fabrizio Bensch

Mr. Macron said he had previously discussed creating a euro-zone budget when he was economics minister with his German counterpart, Sigmar Gabriel, who hopes to take Germany’s Social Democrats into the chancellery in federal elections set for the fall.

“I had managed to convince Sigmar Gabriel,” Mr. Macron said. “We had signed a text on this together.”

But the proposal never came to fruition in Germany, which opposes the issuance of common debt with other euro-zone countries, including France.

If a common financing structure is not created, Mr. Macron warned that euro-zone members would continue to get bogged down in never-ending debates and acrimony over fiscal reforms and adherence to euro-zone budget rules.

 

Jean-Michel Hauteville is an editor at Handelsblatt Global in Berlin. To reach him: hauteville@handelsblatt.com