Macron boosts Merkel ahead of key coalition vote

French president Emmanuel Macron (R) welcomes German Chancellor Angela Merkel at the Elysee Palace in Paris on January 19, 2018. (AFP)
Updated 20 January 2018
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Macron boosts Merkel ahead of key coalition vote

PARIS: French President Emmanuel Macron said Friday that his ambitious EU plans to reform the European Union need German backing, as Chancellor Angela Merkel gears up for a crucial vote on forming a new coalition government.
“Our ambition cannot come to fruition alone,” Macron told a joint press conference with Merkel before talks in Paris. “It needs to come together with Germany’s ambition.”
Merkel’s immediate focus is domestic, with her political future on the line after more than 12 years in power.
On Sunday, some 600 delegates from Germany’s Social Democrat (SPD) party will be asked to give the green light to a preliminary coalition agreement reached with her conservatives last week.
“I am confident of the path ahead and I believe that at the SPD congress many will be open to the coalition negotiations,” Merkel told reporters in Paris.
“But the decision is for the Social Democrats in Germany alone.”
At Merkel’s meeting with Macron, which appeared aimed at giving her a boost, the German leader said a “stable German government” was crucial for the EU to move forward with its reform agenda.
In November, she was left considerably weakened after her first attempt to form a new coalition government collapsed when the pro-business FDP party walked out.
She then turned to the SPD, her outgoing governing partners with whom she hopes to form another grand coalition.
Macron, who is driving attempts to reform the EU in the wake of Britain’s decision to leave the bloc, refused to be drawn into trying to predict the outcome of Sunday’s vote, saying it could be “counterproductive.”
But he stressed the pro-European credentials of the SPD and said the coalition blueprint showed “true European ambition.”
“The chancellor has ambitions for Europe, SPD leaders have shown they have ambitions for Europe, and the coalition outline has them too,” Macron said.
Macron has made no secret of the fact that he would like to see the SPD, which is enthusiastic about his proposals for closer eurozone integration including a common budget, remain on Germany’s front benches.
Social Democrats are hesitant to renew a right-left “grand coalition” with Merkel’s conservatives, fearing their vote at the next election could plunge yet further from last year’s historic low of 20.5 percent.
In an interview with AFP, German Foreign Minister and SPD stalwart Sigmar Gabriel said both countries “have a joint responsibility to develop all of Europe further” highlighting “reform of the economic and monetary union” as a top priority.
“We have to grasp the historic opportunity that we have with Macron, a convinced European,” Gabriel insisted, “otherwise one day the EU will only exist on paper.”
Some of Merkel’s conservative allies are, however, more reticent about the prospect of closer economic integration.
Last week Macron said a conservative-social democrat tie-up would be “good for Germany, good for France and above all good for Europe.”
Leading economists from both countries on Wednesday published a “blueprint for reform” for the eurozone that calls for new fiscal rules and an independent watchdog to make the currency more resilient against crises.
But the economists declined to specifically back Macron’s idea for a joint budget or eurozone finance minister.


What’s next for Italy as populists take charge?

Updated 21 May 2018
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What’s next for Italy as populists take charge?

  • Italy's proposed coalition mix of far-right, anti-establishment and euro-skeptic policies.
  • Both Di Maio and Salvini insist that they want to create a coalition that can last the full five-year mandate and implement their program.

ROME: A mix of far-right, anti-establishment and euro-skeptic policies, was promised by Italy’s proposed coalition government, leading the international community to wonder what the future holds for the eurozone’s third largest economy.
Here are answers to five pressing questions as the League and Five Star Movement (M5S) prepare to take charge.
Despite outspoken criticism of the European Union from both parties, the final version of the M5S-League government program does not mention a unilateral exit from the eurozone.
M5S abandoned their idea of a referendum on the euro and while the League has called the currency “a failed economic and social experiment,” the party has proposed a series of reforms and an eventual coordinated group exit along with a number of other countries in the long term.
M5S hold more clout in the new coalition having won almost 33 percent in March’s election, compared to the League’s 17 percent, even if League leader Matteo Salvini claims to represent the 37 percent who voted for his rightwing coalition.
While Salvini is the undisputed top dog of the League, the shadow of M5S founder Beppe Grillo, an outspoken former comedian, still looms large over the party led by Luigi Di Maio.
A question mark also hangs over the fate of flamboyant former premier Silvio Berlusconi. Part of the rightwing alliance with Salvini, Berlusconi begrudgingly gave the green light for the League and M5s to make a deal without his Forza Italia party.
The aging media tycoon, however, disapproves of the new government program and, after a recent court ruling overturned a ban on him holding public office, could once again be able to exert influence from inside parliament — if a member of his party offers up their seat.
Never afraid of a long shot, Berlusconi has also offered himself up as a potential future premier.
Both Di Maio and Salvini insist that they want to create a coalition that can last the full five-year mandate and implement their program.
Their parties, however, only have a wafer-thin six vote majority in the Senate, which holds the same power as that of the Chamber of Deputies, where they have a 32-vote majority.
The two parties will have to hold onto their MPs, particularly those who view the new alliance with skepticism, in order to go the distance.
A tumultuous campaign, inconclusive elections and a prolonged period of political deadlock meant that financial markets were already nervous, especially faced with the possibility of a return to the polls.
So the prospect of a M5S-League accord was initially met with some relief — until the coalition revealed their government program.
In response to the document’s costly financial measures and euroskeptic tone, key financial indicators pointed to decreasing investor confidence in Italy.
The difference in yield between Italian and German 10-year government bonds has gained 40 points in less than a week, increasing to 170 points.
Italy’s president Sergio Mattarella has the power to veto ministers and reject any law deemed financially non-viable for the country.
He is also the guarantor of Italy’s international commitments and will keep a close eye on any move to modify the country’s role on the world stage, especially given Salvini’s scathing comments about the EU and praise for Russian leader Vladimir Putin.