German Finance Minister Wolfgang Schauble gives a press conference at the end of an EU Eco-Finance meeting at the EU Council building in Brussels, July 14, 2015. AFP PHOTO / THIERRY CHARLIERTHIERRY CHARLIER/AFP/Getty Images
Wolfgang Schäuble, German finance minister © AFP

German finance minister Wolfgang Schäuble is proposing to strip the European Commission of some of its core oversight powers in an effort to avoid politicising EU decision-making at a time when the executive body has touted its new partisan role in Europe.

The European Commission has quasi-judicial authority over some of the most sensitive Europe-wide decision making, particularly in the area of merger approvals and antitrust monitoring, powers that could be moved to independent bodies under Mr Schäuble’s plan.

Berlin has also long called for the eurozone’s budget rules to be triggered automatically when a country breaches EU debt and deficit ceilings, and has complained bitterly that France has been given repeated waivers by the commission despite violating those limits for years — waivers some have viewed as politically motivated.

Mr Schäuble’s proposals, first reported by the German daily Frankfurter Allgemeine Zeitung and later partially confirmed by the finance ministry, are part of a growing debate over the future of the eurozone following this month’s fight over Greece’s status in the EU’s common currency.

Eurozone officials had been planning to accelerate moves to overhaul the eurozone if Greece was forced out of the currency union as a way to convince the financial markets that the rest of the bloc was pulling closer together and would not lose another member.

But the fraught debate over Greece at the July summit that eventually led to a bailout agreement has convinced many governments they must still act despite the Greek deal, especially after what many countries feel was Berlin’s high-handed role in the talks.

François Hollande, the French president, pressed for the eurozone overhaul almost immediately after the Greek deal was reached and, in a recent interview in the Financial Times, Italian finance minister Pier Carlo Padoan called for a rapid move to a full political union.

However, the new ideas being advanced have highlighted the differences between eurozone countries on the way forward, particularly between the French and Italian camp and Berlin.

Both Paris and Rome are emphasising a pooling of resources, either in the form of a eurozone budget or a common EU unemployment scheme, while Berlin is focusing on giving the eurozone’s rules more bite and less interference from political forces.

The German finance ministry said Mr Schäuble first raised his ideas at a meeting of his EU counterparts in Brussels on July 14, where he emphasised the need to send a “clear signal about the stability and integrity of the eurozone”, against the backdrop of the Greek crisis.

But according to a eurozone official who attended the meeting, the discussion on the European Commission’s role was very brief and Mr Schäuble made no formal presentation on setting up independent agencies.

The bulk of Mr Schäuble’s remarks focused on the need for better supervision of Greek banks and ensuring the independence of the EU’s new Frankfurt-based bank supervisor. His remarks on the politicisation of the commission were no more than a sentence or two, the official said.

Mina Andreeva, a European Commission spokeswoman, declined to comment on the plan, saying Brussels had received no formal proposal from Berlin.

But Ms Andreeva defended the more political style of the commission under Jean-Claude Juncker, president, arguing it was justified after last year’s European parliament elections, where Mr Juncker ran as the centre-right’s presidential candidate. “It does not mean a political commission is more partisan,” she said.

The German proposal is not aimed at weakening the commission but at safeguarding regulatory independence at a time when the EU body is becoming increasingly political, according to people familiar with Mr Schäuble’s thinking.

Mr Schäuble raised the issue during a discussion of the EU’s “five presidents’ report” on the future of the eurozone. The report was prepared by Mr Juncker, after Mario Draghi, head of the European Central Bank, warned last year that eurozone leaders had become complacent about the future of the common currency and needed to increase their efforts to overhaul eurozone governance. It called for completing policies that were started at the height of the crisis, but put off any new initiatives until 2017 at the earliest.

But after the contentious debate over Greece’s future, the Luxembourg government, which now holds the EU’s rotating presidency, agreed to renew discussions on eurozone reform at the finance ministers’ next meeting, scheduled for September.

Get alerts on European Commission when a new story is published

Copyright The Financial Times Limited 2021. All rights reserved.
Reuse this content (opens in new window) CommentsJump to comments section

Follow the topics in this article