FRANKFURT, Germany (AP) — Sunday’s national election in Germany will sound the starting gun for a renewed debate on fixing flaws in Europe’s shared currency to prevent future crises.
France’s new president Emmanuel Macron has made it clear he is willing to push for change to strengthen the euro and is expected to make proposals in a major speech Tuesday. He is pushing for, among other things, a finance minister for the eurozone to oversee a central fiscal pot of money that could even out recessions in individual members.
Even pro-euro policymakers concede their 19-nation currency union contains weaknesses that fed its debt crisis — and leave it exposed to new trouble. But action on fixes has slowed.
Macron’s ideas are not new but several of them have faced resistance from Germany, always allergic to the idea of being handed the bill for other members’ troubles. For example, German Chancellor Angela Merkel and her finance minister, Wolfgang Schaeuble, have pushed back against the idea of EU-wide insurance on bank deposits meant to keep bank troubles from hitting government finances.
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Now there are signs that after its own elections are out of the way, Germany might be more open to change or at a minimum speeding up steps — like the deposit insurance idea — that have stalled. Polls suggest Merkel will win a fourth term. What’s not clear is which party her center right Christian Democratic Union will form a coalition.
“In several ways, the coming 12-18 months represent an exceptional opportunity for European reform,” says Nicolas Veron, senior fellow at the Bruegel think tank in Brussels and at the Peterson Institute for International Economics in Washington. Reasons for that, he said, include:
—The two biggest EU countries, France and Germany, will now have new governments with fresh mandates from voters.
—Europe’s banks are in better shape and the economy is growing, meaning leaders are not preoccupied with fighting a crisis.
—Anti-euro populists have been turned back at the polls this year in France and the Netherlands, giving pro-EU forces a fresh shot of confidence.
—Memories of the debt crisis that threatened to break up the eurozone at its peak in 2011-2012 may still be vivid enough to overcome complacency.
Merkel has expressed cautious openness to tweaking the setup of the euro. “I have made clear that I don’t…