The CDU's ‘nein’

Germany's Christian Democrats oppose European reforms

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All that glitters. Source: imago / photothek

While the leaders of France and Germany seek to reform Europe, Angela Merkel’s party is blocking the way.

Senior politicians in the governing Christian Democrats plan to nix a proposal that foresees a European Union finance and economics minister and an EU-wide banking union to increase the region’s stability. Instead, the center-right party insists that Berlin’s parliament keep a veto on European decisions that relate to money.

That’s because even as Europe grapples to rein in risk, and create a firewall against future financial crises, many in Berlin fear a loss of autonomy. They worry that Germany, Europe’s richest country, could wind up having to pay for weaker members under a shared budget pot. They say this so-called “transfer union,” while looking askance at southern Europe, could mean they wind up subsidizing bad debt.

So Volker Kauder, the floor leader of the CDU, its sister Christian Social Union party, and Mr. Kauder’s counterparts from Germany’s 16 states introduced a resolution to cement this position at a meeting on Monday in Frankfurt. That means opposing any stability-oriented policies that cede national decision-making powers, such as the appointment of a minister to oversee financial and economic questions in the bloc.

The politicians’ fear that efforts to develop Europe’s stability mechanism into a European monetary fund, and the very idea of supporting further economic convergence in the euro zone, could all be bad news for sustainable budgetary and finance policies. The party leaders want to keep those kinds of decisions firmly under parliamentary control, according to sources close to the group of floor leaders from the different states.

The CDU politicians’ stance hinders not only the attempts of their leader to press forward on fixing the bloc, but also those of Emmanuel Macron, the French premier elected a year ago who is pushing hard for reform.

Ms. Merkel and Mr. Macron had hoped to agree on reforming the euro zone ahead of a summit in Brussels in June. But even as Mr. Macron visited Ms. Merkel in April, there were already indications that this could prove difficult.

Those leaders have a lot on their plate at the Frankfurt gathering on Monday, including decisions on asylum policy, affordable housing, and how to beef up Frankfurt’s prospects as a financial center for Europe once Britain leaves the bloc. Ms. Merkel and Mr. Kauder will be joined by Mike Möring, who heads the group of floor leaders in state parliaments; Helge Braun, Ms. Merkel’s chief of staff; Volker Bouffier, the state premier of Hesse; and Jens Weidmann, president of the Bundesbank.

All the issues on their agenda matter, but the CDU’s stance will shape how far Mr. Macron and Ms. Merkel can go in their attempts to prepare Europe for the future. Ms. Merkel may need all the political clout she can muster.

Daniel Delhaes and Heike Anger write about politics for Handelsblatt and are based in Berlin. To contact the authors: d.delhaes@handelsblattgroup.com and h.anger@handelsblattgroup.com

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