A consensus has emerged in Germany, France and Italy over the need to create a eurozone budget, according to Belgium’s former Minister of Finance, Philippe Maystadt. But the popularity of anti-European parties is blocking progress. EURACTIV France reports.

From the euro crisis to the Schengen visa-free travel area, European cohesion is being tested to its limits.

But while some, like the United Kingdom, are questioning their very membership of the bloc, others are pushing for the European project to be strengthened, beginning with the eurozone.

“As an emergency response, we have taken a number of necessary measures, but it was unrealistic to believe that we could have finalised the eurozone project. We concentrated on the most important issues,” said Philippe Maystadt, a former deputy prime minister of Belgium and former President of the European Investment Bank.

“My worry is that things will stay the way they are because the crisis is less acute, there is less urgency. I think this is a real danger,” he said at a meeting organised by the International Centre of European Training (CIFE), a think tank based in Brussels, on 3 March.

“We have lost momentum. Unfortunately, it is often like that in politics, it is not a European phenomenon: we have to be staring into the abyss before we will take the necessary action.”

A separate eurozone budget

Maystadt is no dyed-in-the-wool federalist, but he believes the eurozone must continue its integration process, or run the risk of “progressive erosion”, which would eventually cause “the house to collapse”.

And for the former EIB president, a good number of reforms could be made immediately, without modifying the European treaties.

“It seems to me that the most realistic reform, which is also the most urgent, is a mechanism – a budget – to allow member states to absorb asymmetric shocks,” the former minister said.

“The idea of such a mechanism is clearly an idea on the rise,” he added.

In itself, the idea is nothing new. The height of the euro crisis witnessed a lively debate over how to reconcile the European budget with this future budgetary tool, which has remained little more than a sketch.

François Hollande, who at the time had just been elected president of France, even went so far as to discuss the project with the Brits and the Czechs, in an attempt to convince them that the budgetary capacity of the eurozone would be used as a “complement” to, and not a “substitute” for the European budget.

Hollande: Eurozone budget will come 'in addition, not in substitution' of EU budget French President François Hollande sought to reassure Britain and other non-eurozone countries that plans to establish a special budget for the currency bloc will only come "in addition" to the EU budget and not "in substitution" of it. But he also warned: No country can prevent the others from moving forward.

But the attention of EU leaders finally turned to more pressing subjects, like the construction of the Banking Union.

Jean-Claude Juncker, the current president of the European Commission, tried to resurrect the debate in 2015 after his nomination for the Commission presidency, but again, nothing became of it.

On top of the current distractions, in the form of the UK referendum and the refugee crisis, the up-coming 2017 elections in France and Germany mean there is little chance of any meaningful debate on the eurozone budget in the near future.

Juncker paper fails to spark debate about eurozone’s future National politicians have remained largely indifferent to a recent “analytical note” by the European Commission aimed at launching a debate over the future of the eurozone. EU leaders seem to be keeping their powder dry until the EU summit in June, when a second paper is expected. The EURACTIV network reports.

For “a kind of European federalism”

But for Maystadt, it is precisely this absence of debate on the future of the eurozone that is becoming a worry.

“On the eurozone budget, I have met with officials in Germany, in France and in Italy, who have told me that this is what they need. But they don’t dare to say it publicly, for fear of provoking reactions from parties like the National Front and the AfD (Alternative for Germany.)”

“And I think this is a mistake, because I am convinced that the citizens – if we properly explain the issues at stake – will understand that we would be more efficient at solving problems if we made progress towards a kind of European federalism in certain areas.”

“Federalism”: the word is out of the bag. But Maystadt does not see himself as an idealistic European militant, disconnected from national politics.

“I am not someone who believes that everything has to be sorted out at the European level, far from it. But in certain key areas I think we can explain to the European citizens why we would be more efficient if we acted together at the European level.

“I have seen that Renzi in Italy is opening a public debate. It would be good if this were to happen in other countries.”

“Extension of the ESM”

Beyond the debate on the establishment of a eurozone budget, which seems to be fairly consensual in principle, the practical details of how this would be achieved still need to be smoothed out.

For Maystadt, the easiest solution would be to establish this budget as “an extension of the European Stability Mechanism (ESM),” the European rescue fund put in place during the crisis. If it had been activated in time, this fund would have made the EU’s intervention in Greece far less onerous, he added.

In order to avoid abuses of the system, and to satisfy Germany’s demands, the use of the fund would depend on the country that made the demand implementing the European Commission’s specific economic and budgetary recommendations.

The mechanism should never be allowed to become “an incentive to persevere with imbalances”, Maystadt insisted. Instead, he suggested that it should “be used to cover some of the additional expenses” caused by a crisis, “but not the whole bill”.

Finally, the budget would be piloted by a “full time president” of the Eurogroup, who would be “answerable” to the European Parliament and would be “obliged” to explain themselves to national parliaments.

Social dimension

In addition to its purely monetary dimension, Maystadt believes the euro should also take on a real social dimension, in order to win trust from citizens.

“I think we absolutely need to strengthen the social dimension of the eurozone. If we want the support of the citizens, they have to believe that Europe is not only the domain of economic technicians, but that it directly affects them, and can have a positive effect on their lives.”

One idea that wouldn’t require treaty change would be to launch an “enhanced cooperation” mechanism to establish a “mandatory inter-professional minimum wage” between the countries of the eurozone. Otherwise, whole sectors of the economy will continue being social “black holes”, like the abattoirs in Germany, where the “exploitation of workers and unfair competition” was the norm, Maystadt said.

Over the long-term, the Belgian politician believes a revision of the treaties will be necessary to allow the eurozone to progress. But such a big project will have to be launched after the 2017 elections in France and Germany.

“If there comes a time when we can negotiate a treaty with the countries that would agree to go further with European integration, then I think this has to be done. And of course, some governments are already thinking about this: I know that they are working on it in Germany and Italy. I recently saw a document from the Italian Ministry of Finance, aimed at consolidating the Economic and Monetary Union.”

Hollande and Merkel join forces to push for eurozone integration Motivated by the urgent need for reform, the French and German heads of state will put aside their deep political differences and champion eurozone reform together. EURACTIV France reports.