Merkel eyes overhaul of EU finances for post-Brexit bloc

German Chancellor Angela Merkel delivers her speech aboutEuropean policy ahead of a EU summit at the parliament Bundestag in Berlin. (AP)
Updated 22 February 2018
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Merkel eyes overhaul of EU finances for post-Brexit bloc

BERLIN: Brexit offers the EU an opportunity for a broad rethink of its financial set-up, German Chancellor Angela Merkel said on Thursday before an EU summit that will tackle the bloc's future budget.
Addressing the Bundestag (lower house of parliament), Merkel made clear that the future of the EU would be a priority in her fourth term, provided a coalition deal between her conservatives and the pro-EU Social Democrats is approved by SPD members.
"We need a new start for Europe," said Merkel, adding the looming debate on a new budget for the 27-member bloc after Britain's withdrawal in 2019 could lead to some major changes.
"The debate about the future financial framework is also a chance to look at the finances of the EU as a whole," she said.
Leaders at Friday's summit will discuss whether to boost the next seven-year budget to pay for common policies on security, defence and migration between 2021 to 2027.
Germany, Europe's biggest economy, is the biggest net contributor and has said it is ready to pay more although some others, including the Netherlands, argue that a smaller bloc - without Britain - implies a smaller budget.
Merkel sought to reassure those in her conservative bloc who are more sceptical about deeper EU integration and paying out for poorer, debt-ridden member states.
"Solidarity cannot be a one-way street," she said.
"The stability and growth pact will remain the compass for Europe," she added, reiterating that liabilities and supervision must go hand in hand as part of any euro zone reform.
Taking aim at some eastern European members, Merkel also said the bloc's structural funds should in future be linked to taking in foreign migrants. Eastern members with right-wing nationalist governments have rejected an EU burden-sharing plan for migrants coming from the Middle East, Africa and Asia.
"With the distribution of structural funds, we must ensure that the allocation criteria in future reflect the engagement of many regions and municipalities in absorbing and integrating migrants," she said.
That idea is "political blackmail," said the far-right, eurosceptic Alternative for Germany (AfD), which will be the main opposition party if a "grand coalition" goes ahead. The AfD made clear it rejects bigger payments to the EU.
"Germany is going from teacher to taskmaster to paymaster," Alexander Gauland, head of the AfD's parliamentary group, said to applause from his lawmakers in a riposte to Merkel's address.
The chancellor, at risk of being supplanted as Europe's most influential leader by French President Emmanuel Macron, said the EU should be more ambitious in developing a response to growing global political and economic pressures.
"More than ever we need European answers to the pressing, big questions of our time," she told the Bundestag, urging the EU to adjust to digital advances in technology to be able to compete economically in the future.
Macron has offered an ambitious vision for Europe, but has had to wait for a response from Germany, due in part to Merkel's protracted attempts to cement a governing coalition.
She emphasised that European policy would be front and centre in a new grand coalition with the Social Democrats, which would be a repeat of her last coalition that prevailed up to the Sept. 24 election.
"Germany can only do well in the long run if Europe does well," she said. "It is no coincidence that the first chapter of the coalition agreement is on Europe".
The coalition parties have agreed on a deal but SPD rank-and-file are voting to approve it. The result is due on March 4.


‘Get prices down’ Trump tells OPEC

Updated 20 September 2018
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‘Get prices down’ Trump tells OPEC

  • Trump highlights US security role in region
  • Comments come ahead of oil producers meeting in Algeria

LONDON: US president Donald Trump urged OPEC to lower crude prices on Thursday while reminding Mideast oil exporters of US security support.
He made his remarks on Twitter ahead of a keenly awaited meeting of OPEC countries and its allies in Algiers this weekend as pressure mounts on them to prevent a spike in prices caused by the reimposition of oil sanctions on Iran.
“We protect the countries of the Middle East, they would not be safe for very long without us, and yet they continue to push for higher and higher oil prices!” he tweeted.
“We will remember. The OPEC monopoly must get prices down now!”
Despite the threat, the group and its allies are unlikely to agree to an official increase in output, Reuters reported on Thursday, citing OPEC sources.
In June they agreed to increase production by about one million barrels per day (bpd). That decision was was spurred by a recovery in oil prices, in part caused by OPEC and its partners agreeing to lower production since 2017.
Known as OPEC+, the group of oil producers which includes Russia are due to meet on Sunday in Algiers to look at how to allocate the additional one million bpd within its quote a framework.
OPEC sources told Reuters that there was no immediate plan for any official action as such a move would require OPEC to hold what it calls an extraordinary meeting, which is not on the table.
Oil prices slipped after Trumps remarks, with Brent crude shedding 40 cents to $79 a barrel in early afternoon trade in London while US light crude was unchanged at about $71.12.
Brent had been trading at around $80 on expectations that global supplies would come under pressure from the introduction of US sanctions on Iranian crude exports on Nov. 4.
Some countries has already started to halt imports from Tehran ahead of that deadline, leading analysts to speculate about how much spare capacity there is in the Middle East to compensate for the loss of Iranian exports as well as how much of that spare capacity can be easily brought online after years of under-investment in the industry.
Analysts expect oil to trend higher and through the $80 barrier as the deadline for US sanctions approaches.
“Brent is definitely fighting the $80 line, wanting to break above,” said SEB Markets chief commodities analyst Bjarne Schieldrop, Reuters reported. “But this is likely going to break very soon.”