45 / 169
LINES OF CONFLICT ON EU REFORM IN GERMANY
45
plans for Europe. The plans in the coalition
agreement are in many respects significantly dif-
ferent from previous statements and domestic
German debates about the EU.
Thus the coalition wants to leave behind the
well-worn debate about Germany being a net
contributor, and strengthen the European Union
financially, even if that means higher contribu-
tions. On one hand it will be necessary to make
up for UK contributions to the EU budget when
they stop, and on the other hand more funds
should be available for new Community tasks,
although cuts are likely. One policy that is not
described in detail is provision of funds “for
economic stabilisation and social convergence
and to support structural reforms in the
Eurozone” as a starting point for an “invest-
ment budget” that is to be established later for
the currency union. The prospect of an EU
budget for the euro states (i.e. “fiscal capacity”)
allowed fiscal union supporters in the SPD to
prevail, as this could be used to form the nu-
cleus of an automatic stabiliser. On the other
side, supporters of a stability union with rewards
for structural reform managed to revive the idea
of a competitiveness instrument, which was
hotly debated in 2013 with the aim to enforce
structural reforms by new reform obligations.
They plan to implement this through a policy
also favoured by the coalition: developing the
ESM into a European monetary fund.
From the perspective of a fiscal union, it is
also desirable to have closer economic coordina-
tion of the euro states, including further harmo-
nisation of rules to avoid tax dumping, tax fraud
and tax evasion, and to align corporate tax rates.
A European social pact should also be conclud-
ed, to develop unified requirements for mini-
mum wage systems and social security provision,
and to prevent wage and social dumping. In
comparison with the plans of previous German
governments, these proposals could certainly
lead to a progressive move away from the former
economic policy line, and come closer to meeting
the demands of France, Italy and Spain. However,
the stability-oriented hawks have also managed
to ensure that the coalition agreement still states
that in any reform of the currency union, the
Stability and Growth Pact must continue to be
the “compass”, and risk and responsibility must
still be linked to each other.
All three coalition partners agree that the EU
should play a central role in regulating and con-
trolling migration policy. There is support for the
creation of a European asylum system, with a
fair mechanism for distribution among EU
states, and ensuring common standards for asy-
lum procedures. Protection of the EU’s external
borders should be extended. Regarding the eco-
nomic line of conflict discussed above, the coali-
tion would like to make individual improve-
ments to integration measures, in line with the
principle of “rights and responsibilities”. More
funds are promised for federal states and mu-
nicipalities. However there is no prospect of a
broad integration programme. The Growth and
Stability Pact, the debt brake and avoiding new
public sector debt are concepts that are held
sacrosanct by the new government, which at
the same time also aims to exploit the budget
surplus to invest in education, childcare, house
construction and care.
Nonetheless, it is doubtful that this will be
sufficient to quieten the public’s concerns about
competition and a drop in living standards due
to migration, or to go beyond paper-based re-
form compromises for the Eurozone. However,
more positively, many small steps could certain-
ly result in significant progress in integration.