Germany's Schauble moves away from federalist EU vision

23/3/2017

Finance minister sets aside belief in closer integration to advocate looser ‘multi-speed’ governance

By Stefan Wagstyl and Guy Chazan

German finance minister Wolfgang Schäuble, a champion of a federalist EU, has set aside his longstanding belief in closer integration and advocated a looser “multi-speed governance” for the bloc as it tries to rediscover its sense of purpose in a 60th anniversary summit.

The longstanding ally of Chancellor Angela Merkel said in an interview that the EU needed flexibility in the face of populist hostility to the transfer of more powers from national capitals to Brussels.

In an interview just days before the UK is set formally to notify the EU’s other 27 members of its intention to quit the bloc, Mr Schäuble denied that he was disappointed with the fading of European federalist ideas, which the 74-year-old has espoused for decades and are enshrined in the EU’s commitment to “ever closer union” adopted in 1983.

But he struck a regretful tone, saying: “The federal idea has not gone away but at the moment it has no chance of being realised . . . In all or in most European states there are no broad majorities to give additional shares of national sovereignty to Brussels.

“So we have to improve [instead] . . . our intergovernmental methods. Second best is always better than nothing.”

Mr Schäuble also dashed the hopes of southern and eastern European states that Germany might respond to populist attacks on the EU by pouring more money into EU budgets.

While Germany profited from the union and was willingly a net contributor, it wanted to see better results, he said. “We must talk about things in the right order. First, more needs to be achieved with the existing EU budget.”

EU leaders gather in Rome on Saturday for a summit marking 60 years since the bloc’s founding treaty was signed in the same city. Leaders are expected to endorse a “multi-speed” approach to further co-operation for the bloc’s future after Brexit, which the UK has said it will trigger on March 29.

The support of one of Europe’s most impassioned federalists will give heart to Ms Merkel, French president François Hollande and other west European leaders who are backing the multi-speed plan.

But it could irritate Poland, which fears that the approach could split the EU between better-integrated west European countries and their eastern satellites and possibly undermine common security.

Mr Schäuble said the multi-speed idea — advocated by Jean-Claude Juncker, president of the European Commission — was “not directed against others. We don’t want to aspire to exclusivity. But those who want to and can move forward with closer co-operation should be able to do that, and others will follow them.”

He cited the choice offered to most of the EU’s 28 countries of whether to join the 19-member common currency. Future integrated projects range from a European prosecutor’s office and common border forces to the pooling of military resources.

Mr Schäuble also said that EU defence co-operation could help to overcome the “emerging gap between east and west Europeans” when “the east Europeans come to acknowledge that belonging to Europe secures for them a free way of living”.

He said Europe was “in an almost paradoxical situation”.

“On the one hand, much more is required of Europe than some years ago . . . Many people say that if the US wants to play less of a role as global power, then the Europeans must take over a bigger part of that,” he said. “On the other hand, Europe is clearly faced with multiple internal difficulties [as the Brexit decision shows] . . . A growing number of people have doubts about European unity.”

He argued for tighter central control of the eurozone by creating a European Monetary Fund with the capacity to monitor support programmes, such as in Greece, in a similar way to the Washington-based International Monetary Fund.

Mr Schäuble said this could be achieved without altering the EU’s fundamental Lisbon treaty, which would require unanimous support across the 28 member states.

He denied that the EU was a cover for German dominance — a view voiced periodically by Berlin’s critics in the EU and recently by US president Donald Trump.

“A weaker Germany won’t necessarily benefit Europe,” he said. “You shouldn’t say that the stronger one is to blame for being better. You should say the ones that are less successful should try to be better.”

The veteran finance minister said he was sure the tide of history and the pressure for international co-operation would drive further European integration.

“I assume the next 60th anniversary will look very different to today’s,” he said. “But I assume that Europe will in 60 years be an even stronger functioning union. I am sure we will have no falling back to nation states.”

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