German Chancellor Angela Merkel proposed a new European aid fund to bolster competitiveness as she highlighted disagreements over budget rules, joint borrowing and bank supervision in a pre-summit address.
Speaking to lawmakers in Berlin before heading to Brussels for a two-day gathering of European Union leaders, Merkel laid out her vision for more economic coordination, while expressing “surprise” at negative reaction to a proposal for a watchdog with veto power over national budgets. Her vision includes a fund “limited in time and project-based” and possibly stocked by the proposed financial transaction tax, she said.
Merkel said strengthened oversight over national budgets “presupposes” boosting the power of the EU’s monetary affairs commissioner. German Finance Minister Wolfgang Schaeuble raised the idea this week, suggesting the EU official be allowed to reject national budgets as a way to enforce spending discipline.