Angela Merkel backs eurozone ‘economics and finance minister’

Angela Merkel has backed proposals to create a eurozone “economics and finance minister” and a European Monetary Fund, signalling her willingness to pursue deeper integration in the single currency area.

She also backed the idea of a “euro-budget” which could provide funds to countries engaged in painful economic reforms.

Facing elections in less than a month, Ms Merkel has been under pressure to respond to French President Emmanuel Macron’s proposals for reforming the eurozone. He has called for the creation of a eurozone budget that would be voted through by a eurozone parliament and supervised by a eurozone finance minister.

Ms Merkel has been accused by her Social Democrat challenger Martin Schulz of failing to provide a vision of the eurozone’s future, in contrast with Mr Macron.

Speaking at her annual summer press conference on Tuesday, Ms Merkel said she could envisage a eurozone “economics and finance minister” who would help to provide “greater coherence” in economic policy across the single currency area and ensure that “competitive factors are unified”.

“They don’t have to be the same, but they must be similar,” she said.

She also expressed her support for her finance minister Wolfgang Schäuble’s proposal to turn the European Stability Mechanism, the eurozone’s bailout fund, into a European Monetary Fund.

“It’s a very good idea,” she told reporters. “We would be able to show the world that we have all the mechanisms in our eurozone portfolio to be able to react to unexpected situations”.

In addition, Ms Merkel backed a “euro-budget” which could disburse funds to countries that are implementing economic reforms “but which the Stability and Growth Pact doesn’t allow much room for manoeuvre”.

“I don’t understand how Spain can make cuts to its research institutions and universities, which doesn’t improve its competitiveness,” she said. Funds from such a budget could obviate the need for…

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