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Merkel May Dance With France on Eurozone Reform

Walter Russell Mead

In an unexpected change of tune, Angela Merkel says she could be willing to support French efforts to reform the Eurozone. The Wall Street Journal:

Germany could support two central French demands—the appointment of a eurozone finance minister and the creation of a common budget—if some conditions were met, Ms. Merkel told business leaders in Berlin on Tuesday.

“We can of course think about a eurozone budget as long as it’s clear that this is really strengthening structures and achieving sensible results,” she said.

In a striking softening of previous language opposing broader financial burden-sharing among member states, Ms. Merkel said “we could think about a common finance minister…if we aren’t pooling liabilities in the wrong place.”

As qualified as it is, Ms. Merkel’s surprise overture on an approach long taboo in Germany suggests the stalled process of reforming the eurozone could kick back into life sooner than most experts had expected.

This is very clever politics from a Chancellor cruising toward a fourth term. The impression of a unity of purpose between Germany and France that is not linked to any specific German financial commitments is very helpful to Merkel as she moves to crush any remaining SPD hopes of a surprise win in the September elections.

The SPD strategy was to run an anti-Trump, pro-Europe campaign, but Merkel seems to have outflanked them on both sides. She has made the deep differences between her views and Trump’s very clear, and with Macron’s help she is projecting the vision of a re-energized Franco-German partnership that will save Europe.

The question of whether they can accomplish this will be answered only after the German elections, and there will be tough bargaining and politically difficult decisions on both sides. But for now, Angela Merkel is in a happy place.

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