Franco-German thinkers offer Euro-treaty alternative

Mon Mar 3, 2014 1:56am EST
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By Paul Taylor

PARIS (Reuters) - Do intellectuals matter in politics?

To judge by the short-term crisis management and late-night bailouts by governments in the euro zone turmoil of the last four years, it is tempting to conclude that Europe's thinkers have had scant influence on policy.

With the exception of a European banking union, first sketched in 2009 by Nicolas Veron of the Bruegel think-tank and Adam Posen of the Peterson Institute for International Economics and now becoming a reality, policymakers have largely discarded the dozens of blueprints offered by research bodies.

Proposals for a European finance ministry, common euro zone bonds, short-term euro bills or a debt redemption fund have all landed in the waste basket, mostly due to German opposition. The more traditionally federalist plans were too blatantly at odds with the public mood and the power balance among states.

But new thinking from German and French reflection groups advocating closer integration of the 18-nation single currency area, with its own budget and parliament, may now gain traction in Berlin, Paris and Brussels.

Their ambitious ideas contrast with the bland manifestos of the main parties for European Parliament elections in May, penned by politicians eager to reassure voters the euro zone crisis is behind them and fearful of a eurosceptical backlash.

Both the German Glienicke Group and the French Eiffel Group warn that the crisis, though temporarily stabilized, is far from over. Stagnant economies, mass unemployment and mountains of debt pose big risks for the future.

"The complacency of large sections of the German public with regard to the euro crisis is not only unfounded: it is dangerous," the German experts say. "None of the fundamental problems underlying the euro crisis has been solved."   Continued...

An European Union flag hangs outside the European Commission headquarters in Brussels February 13, 2014. REUTERS/Francois Lenoir