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EUROPE

Berlin could block French bid for EU finance job

The former French Finance Minister Pierre Moscovici appears lined up to land the EU’s top finance job. But Germany, whose leaders are reportedly not keen on a Frenchman being in charge of the Commission's monetary brief, could yet scupper the move.

Berlin could block French bid for EU finance job
Ex-French Finance Minister Pierre Moscovici is not Germany's ideal man for a top EU job, it seems. Photo: AFP

Earlier this year Pierre Moscovici was booted out of France’s top finance job, but now he looks set to land one in Brussels. That’s unless Germany manage to thwart his bid to become the EU commissioner for Economic and Monetary Affairs.

Jean-Claude Juncker, the newly elected President of the European Commission, is believed to have already earmarked Moscovici to succeed Olli Rehn, if he is nominated as France’s representative on the Commission.

But reports in Le Monde on Wednesday claim Angela Merkel and her finance minister Wolfgang Schäuble are not keen on Moscovici being given a role that allows him to evaluate and sanction member states’ budgets and reforms, given the fact that France has been unable to meet EU deficit targets.

Merkel who is in Brussels with other EU leaders to thrash out who gets the tops jobs, may yet throw a spanner in the works.

“If we name the ex-French minister for finance to be the commissioner for Economic and Monetary Affairs, who did nothing to enforce the stability pact, it like trying to hunt for the devil using Beelzebub,” German MP Norbert Bathle, from Merkel’s CDU party, told the newspaper Handelsblatt this week.

Germany has long been irritated by France’s inability to respect an EU set target that forced France it to bring its deficit down to below the threshold of 3 percent of its GDP.

The European Union in June last year agreed to give France an extra two years, until 2015, to bring its deficit under the EU-agreed ceiling.

There has been talk recently of Paris approaching Brussels for a further extension, although new Finance Minister Michel Sapin has insisted the deadline will be met.

Germany’s own finance minister Wolfgang Schäuble said as recently as last week that France must respect the agreements to reign in its public debt.

On Wednesday a spokesman for the French government refused to respond to German concerns simply telling Les Echos newspaper: “What is important is that the new European Commission and its members are committed to what the Council decides, knowing that the stability and growth pact prevails.”

In Brussels on Wednesday President François Hollande could have a tough job to convince Merkel of the merits of the man he wants on the Commission. His only chance might be to convince the German chancellor that France's economy is heading in the right direction.

No announcement is likely to be made on Wednesday surrounding Moscovici, who is still not assured of being nominated as France's representative on the Commission, with former Justice Minister Elisabeth Guigou also pushing her case for the role.

EU leaders in Brussels are however expected to decide who will fill the top roles of EU foreign policy chief and European Council President.

Our colleagues at The Local Italy are covering those talks in their live blog. You can keep up to date with the action by clicking here.

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EUROPEAN UNION

The Euro celebrates its 20th anniversary

The euro on Saturday marked 20 years since people began to use the single European currency, overcoming initial doubts, price concerns and a debt crisis to spread across the region.

The Euro celebrates its 20th anniversary
The Euro is projected onto the walls of the European Central Bank in Brussels. Photo: Daniel Rolund/AFP

European Commission chief Ursula von der Leyen called the euro “a true symbol for the strength of Europe” while European Central Bank President Christine Lagarde described it as “a beacon of stability and solidity around the world”.

Euro banknotes and coins came into circulation in 12 countries on January 1, 2002, greeted by a mix of enthusiasm and scepticism from citizens who had to trade in their Deutsche marks, French francs, pesetas and liras.

The euro is now used by 340 million people in 19 nations, from Ireland to Germany to Slovakia. Bulgaria, Croatia and Romania are next in line to join the eurozone — though people are divided over the benefits of abandoning their national currencies.

European Council President Charles Michel argued it was necessary to leverage the euro to back up the EU’s goals of fighting climate change and leading on digital innovation. He added that it was “vital” work on a banking union and a capital markets
union be completed.

The idea of creating the euro first emerged in the 1970s as a way to deepen European integration, make trade simpler between member nations and give the continent a currency to compete with the mighty US dollar.

Officials credit the euro with helping Europe avoid economic catastrophe during the coronavirus pandemic.

“Clearly, Europe and the euro have become inseparable,” Lagarde wrote in a blog post. “For young Europeans… it must be almost impossible to imagine Europe without it.”

In the euro’s initial days, consumers were concerned it caused prices to rise as countries converted to the new currency. Though some products — such as coffee at cafes — slightly increased as businesses rounded up their conversions, official statistics have shown that the euro has brought more stable inflation.

Dearer goods have not increased in price, and even dropped in some cases. Nevertheless, the belief that the euro has made everything more expensive persists.

New look

The red, blue and orange banknotes were designed to look the same everywhere, with illustrations of generic Gothic, Romanesque and Renaissance architecture to ensure no country was represented over the others.

In December, the ECB said the bills were ready for a makeover, announcing a design and consultation process with help from the public. A decision is expected in 2024.

“After 20 years, it’s time to review the look of our banknotes to make them more relatable to Europeans of all ages and backgrounds,” Lagarde said.

Euro banknotes are “here to stay”, she said, although the ECB is also considering creating a digital euro in step with other central banks around the globe.

While the dollar still reigns supreme across the globe, the euro is now the world’s second most-used currency, accounting for 20 percent of global foreign exchange reserves compared to 60 percent for the US greenback.

Von der Leyen, in a video statement, said: “We are the biggest player in the world trade and nearly half of this trade takes place in euros.”

‘Valuable lessons’

The eurozone faced an existential threat a decade ago when it was rocked by a debt crisis that began in Greece and spread to other countries. Greece, Ireland, Portugal, Spain and Cyprus were saved through bailouts in return for austerity measures, and the euro stepped back from the brink.

Members of the Eurogroup of finance ministers said in a joint article they learned “valuable lessons” from that experience that enabled their euro-using nations to swiftly respond to fall-out from the coronavirus pandemic.

As the Covid crisis savaged economies, EU countries rolled out huge stimulus programmes while the ECB deployed a huge bond-buying scheme to keep borrowing costs low.

Yanis Varoufakis, now leader of the DiEM 25 party who resigned as Greek finance minister during the debt crisis, remains a sharp critic of the euro. Varoufakis told the Democracy in Europe Movement 25 website that the euro may seem to make sense in calm periods because borrowing costs are lower and there are no exchange rates.

But retaining a nation’s currency is like “automobile assurance,” he said, as people do not know its value until there is a road accident. In fact, he charged, the euro increases the risk of having an accident.

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