Next Tuesday, the Christian-Democratic Group of CDU and CSU in the Bundestag will decide to effectively reject the EU Commission’s proposal to establish a European Monetary Fund (EMF). The decision will be taken at the same time when French President Macron defends his proposals in an eagerly awaited speech in the European Parliament. The EU Commission had proposed to launch the EMF by an unanimous vote in the EU Council. The CDU/CSU group rejects this procedure and only wants to agree to the EMF if it is established by an amendment of the EU treaties. In many EU countries, approval of an amendment to the EU Treaties could only be achieved through national referenda.
MEP Sven Giegold, financial and economic policy spokesperson of the Greens/EFA group comments on the initiative of the CDU/CSU group:
The CDU/CSU wants to slow down the reform of the Eurozone and thus drive Europe’s future against the wall. The pro-European words in the coalition agreement turn out to be mere lip service. The European Monetary Fund is an essential building block for a healthy and crisis-proof Eurozone. The Christian Democrats actually want to bury the fund, because their proposed Treaty amendments are extremely difficult to achieve. CDU and CSU are putting both Europe’s and Germany’s future at risk, for the two are inextricably linked. The Social-Democrat leadership must now make an unequivocal commitment to EU reforms and reject the blockade by the Christian Democrats.
The proposal of the CDU/CSU is an affront to France. Now Merkel has to put her foot down, also to send a signal to President Macron. The German government has been keeping Macron on hold for a year on the issue of EU reforms. For one year now, the German government has been blocking one reform after another in Europe. An EU finance minister, transnational electoral lists, a European deposit guarantee scheme and a eurozone budget are also currently failing due to Germany. While the CDU/CSU group is slowing down the European Monetary Fund, SPD Finance Minister Scholz is putting the brakes on the European deposit guarantee scheme and thus blocking another central piece of the eurozone reform. Instead of blocking the deposit insurance system, the federal government should propose to make it an EU reinsurance of national systems. This way can safeguard the important institutional protection schemes of the savings and cooperative banks without weakening the Europe-wide security of deposits.
The reforms must be initiated before next year’s European elections; anything else would be election campaign support for Europe’s right-wing populists. The Christian-Democrats are apparently blocking European policy out of fear of attacks from the right-wing populist AfD party. After the tightening of asylum rights and the talk about whether Islam is a part of Germany, parts of the Union are now also following the AfD in European policy.
Leaks of draft decisions by the CDU/CSU Bundestag group (only available in German):
Green arguments on the European deposit insurance scheme (in German):
BACKGROUND INFORMATION on the proposals of the CDU/CSU parliamentary group in the Bundestag
Changing the legal basis is a no through the legal back door
The draft resolution of the CDU/CSU parliamentary group in the Bundestag puts the axe to the European Monetary Fund. The European Commission has proposed to establish the European Monetary Fund on the legal basis of Article 352 TFEU. In this way, the establishment of the Monetary Fund requires unanimity in the Council or at least in the member states involved. However, the EU Treaty does not need to be amended. The Christian-Democrat parliamentary group is now making an amendment to the EU Treaty a condition of its approval of a European Monetary Fund (see paragraph 2, indent 1 of the draft statement on the EMF by the CDU/CSU group) and wants to force the Federal Government to take its line by means of a resolution of the Bundestag. An amendment to the Treaty in this case would trigger referendums on ratification in several Member States (e.g. Ireland, the Netherlands), so that the establishment of the Fund would in fact be postponedinto an unforseeable future. The CDU/CSU group is thus torpedoing the content of the coalition agreement (see line 250).
Change of legal basis gives non-Euro member states such as Hungary and Poland the right of veto
By changing its legal basis, the euro zone is also making itself dependent on non-euro countries such as Hungary or Poland, which have chosen an unconstructive approach on European policy in recent years. The proposal by the EU Commission, on the other hand, also opens the way to “enhanced cooperation”, which requires unanimity but does not give a veto to any country that does not wish to participate in the European Monetary Fund.
Change of legal basis is not legally necessary
The decision on the legal basis lies within the competence of the EU Commission. Contrary to the proposal of the CDU/CSU group, it is not a majority opinion among European law experts that the establishment of a European Monetary Fund under Art. 352 TFEU is not permissible (paragraph 2, indent 1 of the draft opinion on the EMF). In its Pringle ruling, the European Court of Justice even opened the door for the use of Art. 352 TFEU (paragraph 67).
CDU/CSU group has de facto a veto right
The attack by the CDU/CSU group is to be taken so seriously because the Union faction has a de facto right of veto. If the European Monetary Fund is established via Article 352 TFEU, the approval in the Council by the Federal Government in accordance with § 8 IntVG (Integration Responsibility Act) requires an ex ante resolution of the Bundestag, in contrast to normal EU laws. Since the FDP, AfD and the Left have clearly positioned themselves in the direction of rejecting a European Monetary Fund, the approval of the Federal Government requires the active approval of the CDU/CSU group.
German super-veto law is aggravating the crisis, is hostile to Europe and not legally mandatory
In any case, the CDU/CSU group demands a veto right for any allocation of funds from the (paragraph 2, indent 4 of the draft statement on the EWF) for the German Bundestag. This would make it impossible for the Council of member states to change a crisis measure in an emergency if a basic promise of aid (which in any case needs the approval of the Bundestag) has already been given. In serious cases, however, this additional requirement can destroy all flexibility in acute crises and seriously damage crisis countries.
Deprivation of power by the EU Commission and the European Parliament weakens European democracy and is contrary to European law
The Union group wants to take important functions of economic policy monitoring from the EU Commission and transfer them to the European Monetary Fund (paragraph 2, indent 6 of the draft opinion on the EMF). This will not only weaken the European Commission, but also the European Parliament’s control function. Moreover, the reassignment of competences that have already been europeanised is only permissible if the European Treaties are amended to this end. That would be a step backwards in European policy and would also be unacceptable.
Adherence to strict conditions policy is economically and socially harmful
Maintaining “strict conditions” (paragraph 2, indent 5 of the draft opinion on the EMF) for any assistance is a fatal refusal of lessons to be learned. Currently, IMF and EU Commission admit errors in the conditions imposed in return for credit assistance, the CDU/CSU group refuses any self-criticism. Certainly reform efforts are appropriate in return for loans and aid, but they must be changed economically and socially to be effective and fair. The CDU/CSU group’s refusal to learn is also reflected in the stubborn use of the term “sovereign debt crisis”, although this was a global banking and financial crisis that also affected state budgets (item 2 of the reform agenda).