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The failure of the talks to form a new German government means that ambitious plans to deepen the Eurozone integration could be suspended. The European leaders should set guidelines for deepening economic integration in the bloc at a summit in mid-December, where the German contribution will be crucial.

“While Germany does not have a clear position, Berlin will not agree on anything by default, so postponement is the most likely option”, said an Eurozone representative.

The summit should start a six-month working period, resulting in a decision in June 2018 on whether the Eurozone should have a single budget, a finance minister and a separate structure in the European Parliament. The initiative to deepen Eurozone integration, undertaken by French President Emmanuel Macron, also includes the restructuring of the Eurozone rescue fund into a European Monetary Fund and the creation of a country bankruptcy mechanism.

The process will stop until completion of the German government talks.

Some Eurozone officials note that a possible postponement of negotiations to deepen integration is not a big problem as it has concerns about the future structure of the economic and monetary union that currently covers 19 countries. Others, however, point out that the timing of the planned start of the negotiations has been chosen to take advantage in 2018, during which no major Eurozone country will have elections except in Italy.

If negotiations are postponed, decisions on key issues may remain in place in 2019. But then elections to the European Parliament have to be held, a new European Commission formed and a new President of the European Central Bank and President of the European Council.

