For the first time, the 19 eurozone countries agreed in principle on creating a dedicated budget for the single currency area. However, it will lack the stabilisation mechanism sought by Paris, a cornerstone of Emmanuel Macron’s original plan. EURACTIV France reports.

The idea of a creating a budget specifically for the eurozone was formally acknowledged by the 19 heads of state and governments of the euro area at the European summit, which concluded in Brussels on 14 December.

This approval by leaders is a first. Moreover, it is a good deal for the French president, who put forward the idea of a eurozone budget and managed to convince Angela Merkel, who was naturally cautious on the matter, over the course of several months.

“This European Council has been one with results on several matters where we had been making proposals for months, notably on the eurozone,” Macron said at a press conference at the end of the summit. “A year ago, everyone thought this was impossible.”

Leaders wrap up year-long euro reform with face-saving package EU leaders concluded on Friday (14 December) a year-long discussion to bolster the eurozone by approving extra money to resolve failing banks and additional powers for the European Stability Mechanism, the EU’s rescue fund.

“We’ve never seen so much progress made in such a short time,” added President of the European Commission Jean-Claude Juncker. In the conclusions adopted by the 19 leaders, a clear mandate was given to finance ministers to work on defining the future common pot.

Within the Eurogroup, ministers will therefore have to work on the basis of the Commission’s proposal in order to produce a budget proposal by June 2019, right after the European elections take place in late May.

In practical terms, everything remains to be done to finalise the outlines of the future common eurozone budget. This includes its size, its funding arrangements and its timeline. France and Germany’s idea of funding this future budget through a digital tax appears unrealistic, given how contested this plan is by the member states.

Despite this lack of substance, the political agreement between the 19 eurozone countries is Macron’s first political victory. “Since the Sorbonne speech 15 months ago, much has been done, but much remains to be done,” he emphasised.

“France will make new proposals to move Europe forward, that’s how I’ve been proceeding since the first day, that’s how I will continue to proceed,” stated Macron, positioning the eurozone budget decision as one of France’s victories at European level, alongside those on the directive on the posting of workers and road transport.

Nevertheless, Paris’ main objective was not achieved: establishing a stabilisation mechanism. “France continues to believe that a stabilisation function is needed within this budget, there is no convergence on this matter at the moment,” the French president acknowledged. Without the stabilisation component, the eurozone budget could miss its mark.