Merkel seeks ‘middle ground’ rescue package
Her demand that all eurozone countries sign up to a Competitiveness Pact she devised with French President Nicolas Sarkozy was met with outrage by many of the member states at the summit on Friday.
However, Chancellor Merkel, facing a series of elections in the federal German states, some of them vital for her government’s survival, will need to show some gain that she has wrested from the EU in return for a revamped and possibly enlarged rescue package revolving around the €750 billion fund.
Members of the European Parliament were also annoyed at the proposal that countries should harmonise their corporate tax or at least the way it is calculated, end centrally deciding wage increases and agree on pension entitlements and retirement ages.
But Herman Van Rompuy, president of the council, told MEPs as far as he was concerned, if a number of countries wished to co-ordinate in such areas, so much the better for Europe’s competitiveness.
Economic and Monetary Affairs Commissioner Olli Rehn said yesterday that the legislation currently going through the parliament and being finalised by member states on improving economic governance “provided the right framework for a truly European response”.
He added it would allow euro area members to go further on issues to improve competitiveness if they wished. The objectives of the pact was “broadly in line with proposals in the growth survey” expected to be finalised this year.
EU sources say they do not expect that after years of resisting member states will over the next few weeks come into line with plans to harmonise tax or change their wage setting procedures.
“We do not see the political landscape change that radically following these proposals from Ms Merkel that came out of the blue,” one source said.
