On Thursday, Emmanuel Macron and Angela Merkel are set to meet in Paris to discuss the prospects of European integration and, more specifically the governance of the EU. In an interview for the French newspaper Ouest France, Macron stressed the need for Germany is to foster its investment capacity. The French President claimed that EU treaty reforms are a necessary step and what needs to be defined is only the “how and when” of such reforms. Moreover, he argued that the Eurozone has developed in an unbalanced way over the past years, with stronger countries increasing their competitiveness and weaker ones lagging behind. In other words, there has been no convergence, Macron said, and public debt in some countries has risen to new heights instead of decreasing.

Speaking to a German news agency, Marcel Fratzscher, the Director of the Berlin based German Institute for Economic Research (DIW), warned that notwithstanding the good intentions of the French Government, the German counterpart might lack political will to implement major reforms at the moment. On the other hand, the German newspaper Der Spiegel, revealed that it is France who is currently opposing the establishment of a pan-European tax on financial transactions.

Meanwhile, the French Government is busy with the definition of a new action plan to manage the refugee crisis, and with a labour market reform. On Wednesday Prime Minister Edouard Philippe announced a new plan to manage immigration flows to the country. According to Le Monde the plan focuses mostly on 2018 and 2019 and does not tackle some urgent questions, like the situation in the Northern port city of Calais. Earlier this month, French authorities shut down an illegal refugee settlement at Porte de la Chapelle, in the Northern district of Paris. On Wednesday, the German, French and Italian governments met in Trieste to discuss the migration crisis. Emmanuel Macron admitted that, in the past, “France did not comply with the obligations of the EU agreements on migrant relocation within the Union”.

As for its labour market reform, the French Government is set to get on a collision course with the main social partners in the country, most notably as trade unions. On Wednesday, some deputies of the leading leftist opposition party, La France Insoumise, gathered in centre of Paris to protest against the plans of the Government.

In other news, the Greek bailout is making the headlines in Greece and Germany. On Wednesday, a report of a Parliamentary discussion inside the German Bundestag documented by the Süddeutsche Zeitung cast light on the net gains the German government is obtaining from financing the Greek recovery. According to the article, Germany earned almost €1.5 billion in interest payments over the past few years. Some German deputies from the Green party argued that these profits are questionable from a moral point of view.

Meanwhile, the Greek Prime Minister, Alexis Tsipras, sent a letter to the International Monetary Fund (IMF). Tsipras asked the IMF to stay on board in the bailout programme of the Hellenic country and promised new legislative and administrative acts to please the Washington-based institute. On July 20 the IMF is expected to publish its renewed analysis on the sustainability of the Greek public debt. Earlier this year, the IMF said that it would not continue to lend money to Greece without European creditors agreeing on a substantial curtailing of Athens’s outstanding debt.

Meanwhile, the European Commission said that Greece could exit the deficit procedure of the European Semester. According to political and economic analysts, the EC’s recommendation is another step that signals Athens’s ability to get back to financial markets to finance itself outside of the bailout programme.

In an interview for the German newspaper, Handelsblatt, the Director of the European Stability Mechanism, Klaus Regling, said that the euro crisis is over, and the European economy is getting back on track. Regling said that a fourth bailout program for Greece is off the table. Meanwhile, on Wednesday, the former Greek Minister of Finance, Yanis Varoufakis, said he would be open to a public inquiry on the July 2015 decision that led to a temporary imposition of capital controls in the country.


“It’s not an exit bill, it’s not a punishment, it’s not a revenge, it’s simply settling accounts. It’s not easy and it might be expensive, but we are not asking for a single pound or euro more than they have legally agreed to provide. You can discuss this or that budget line, but they have to start by recognising that they have entered into commitments.”

Michael Barnier, Chief Brexit negotiator of the European Commission

Source: The Guardian, 12.07.2017



The number of months left for concluding the Brexit negotiations.

Source: The Guardian, 12.07.2017

Photo Credits CC: Benjamin Stäudinger

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