France says debt issuance would be first step for a euro zone budget

Sat Sep 5, 2015 8:20am EDT
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CERNOBBIO, Italy (Reuters) - A common euro zone budget should initially be funded through joint debt issuance and taxpayers' money should only be used at a later stage, French Economy Minister Emmanuel Macron said on Saturday.

France wants the euro zone to have its own joint budget to carry out investments.

Macron, in an interview with a German newspaper this week, proposed giving a new commissioner powers to coordinate economic policy across the single currency bloc and preside over fiscal transfers between its 19 members.

The idea has met opposition in Germany with Vice Chancellor Sigmar Gabriel asking for more details and saying he was strictly against a "euro tax, or a value-added tax" to fund a common budget.

Germany has also traditionally opposed the idea of shared debt issuance, fearing it would encourage fiscal profligacy in weaker euro zone members.

Macron said financing the shared budget through taxes from the onset would slow down the project.

"For me it should be the first step of a euro zone budget: raising money with a joint liability," he told a press conference at the Ambrosetti business forum in northern Italy.

He expressed confidence a mechanism could be agreed to "raise money together for new proposals, new projects and dealing with euro zone issues."

"As a second stage we have to raise taxes or share taxes. I think it more efficient not to make it a precondition for the euro zone budget otherwise it will take a lot of time," he said.   Continued...

French Economy Minister Emmanuel Macron attends a press conference to unveil measures to help livestock and dairy farmers after the weekly cabinet meeting at the Elysee Palace in Paris, France, July 22, 2015. REUTERS/Alain Jocard/Pool