GERMANY WILL continue shouldering more of the EU’s financial burden in the future, on condition that member states agree to economic policy that reflects Berlin’s “vision of stability”.
Finance minister Wolfgang Schäuble said Germany’s current economic revival should be a source of inspiration to EU neighbours – and a cause for pride, but not smugness, at home.
“On the international stage we will stand up confidently for our growth-friendly consolidation [model],” he wrote in an article for the Frankfurter Allgemeine daily, a nod to the recent transatlantic row over the best way out of the global recession.
Washington pushed for debt-driven economic stimulus while Berlin felt aggrieved at international criticism for its more modest debt stimulants coupled with austerity measures.
With German growth likely to top 3 per cent this year, Berlin feels vindicated and, it seems, would now like to share its economic medicine with the EU.
Mr Schäuble said this could include an EU-wide implementation of Germany’s so-called “debt brake”, legislation to force governments to consolidate budgets by a concrete date, as well as greater sanction tools “for countries who endanger stability in Europe”.
“The efficiency of the stability and growth pact demands a rule-based, tiered system of budgetary policy,” he wrote, with a tighter financial corset for indebted countries with low export rates that are less able to service their debts.
In addition, Berlin would like to see an “ordered restructuring” facility for euro-zone members to protect EU taxpayers from the prospect of future bail-outs.
Despite a strong return to health, the German government has insisted it will see through its austerity measures as planned.
There is “no leeway” in the budget despite the healthy growth, jobless and tax figures, Mr Schäuble added, with economic “normality” likely to return by 2012 at the earliest.
Mr Schäuble’s remarks are the clearest taste yet of Berlin’s line in upcoming EU budget negotiations.
Berlin was “prepared to do more” to ensure economic stability in the union, he said.
“Thus we have to admit that we sometimes have to afford more than others, including financially,” he wrote. “But we also insist that our vision of stability influences European reform.”
Quoting Germany’s post-war finance minister Ludwig Erhard, the revered father of Germany’s model of social market economy, Mr Schäuble’s advice to his EU neighbours is: “Modesty is the order of the day.”
