Transatlantic Take: How Euro Area Deepening Can Reduce the Risk of Brexit

podesta-emails 1,086 words email

P17 D6 V11 V16 V15

-----BEGIN PGP PUBLIC KEY BLOCK----- mQQBBGBjDtIBH6DJa80zDBgR+VqlYGaXu5bEJg9HEgAtJeCLuThdhXfl5Zs32RyB I1QjIlttvngepHQozmglBDmi2FZ4S+wWhZv10bZCoyXPIPwwq6TylwPv8+buxuff B6tYil3VAB9XKGPyPjKrlXn1fz76VMpuTOs7OGYR8xDidw9EHfBvmb+sQyrU1FOW aPHxba5lK6hAo/KYFpTnimsmsz0Cvo1sZAV/EFIkfagiGTL2J/NhINfGPScpj8LB bYelVN/NU4c6Ws1ivWbfcGvqU4lymoJgJo/l9HiV6X2bdVyuB24O3xeyhTnD7laf epykwxODVfAt4qLC3J478MSSmTXS8zMumaQMNR1tUUYtHCJC0xAKbsFukzbfoRDv m2zFCCVxeYHvByxstuzg0SurlPyuiFiy2cENek5+W8Sjt95nEiQ4suBldswpz1Kv n71t7vd7zst49xxExB+tD+vmY7GXIds43Rb05dqksQuo2yCeuCbY5RBiMHX3d4nU 041jHBsv5wY24j0N6bpAsm/s0T0Mt7IO6UaN33I712oPlclTweYTAesW3jDpeQ7A ioi0CMjWZnRpUxorcFmzL/Cc/fPqgAtnAL5GIUuEOqUf8AlKmzsKcnKZ7L2d8mxG QqN16nlAiUuUpchQNMr+tAa1L5S1uK/fu6thVlSSk7KMQyJfVpwLy6068a1WmNj4 yxo9HaSeQNXh3cui+61qb9wlrkwlaiouw9+bpCmR0V8+XpWma/D/TEz9tg5vkfNo eG4t+FUQ7QgrrvIkDNFcRyTUO9cJHB+kcp2NgCcpCwan3wnuzKka9AWFAitpoAwx L6BX0L8kg/LzRPhkQnMOrj/tuu9hZrui4woqURhWLiYi2aZe7WCkuoqR/qMGP6qP EQRcvndTWkQo6K9BdCH4ZjRqcGbY1wFt/qgAxhi+uSo2IWiM1fRI4eRCGifpBtYK Dw44W9uPAu4cgVnAUzESEeW0bft5XXxAqpvyMBIdv3YqfVfOElZdKbteEu4YuOao FLpbk4ajCxO4Fzc9AugJ8iQOAoaekJWA7TjWJ6CbJe8w3thpznP0w6jNG8ZleZ6a jHckyGlx5wzQTRLVT5+wK6edFlxKmSd93jkLWWCbrc0Dsa39OkSTDmZPoZgKGRhp Yc0C4jePYreTGI6p7/H3AFv84o0fjHt5fn4GpT1Xgfg+1X/wmIv7iNQtljCjAqhD 6XN+QiOAYAloAym8lOm9zOoCDv1TSDpmeyeP0rNV95OozsmFAUaKSUcUFBUfq9FL uyr+rJZQw2DPfq2wE75PtOyJiZH7zljCh12fp5yrNx6L7HSqwwuG7vGO4f0ltYOZ dPKzaEhCOO7o108RexdNABEBAAG0Rldpa2lMZWFrcyBFZGl0b3JpYWwgT2ZmaWNl IEhpZ2ggU2VjdXJpdHkgQ29tbXVuaWNhdGlvbiBLZXkgKDIwMjEtMjAyNCmJBDEE EwEKACcFAmBjDtICGwMFCQWjmoAFCwkIBwMFFQoJCAsFFgIDAQACHgECF4AACgkQ nG3NFyg+RUzRbh+eMSKgMYOdoz70u4RKTvev4KyqCAlwji+1RomnW7qsAK+l1s6b ugOhOs8zYv2ZSy6lv5JgWITRZogvB69JP94+Juphol6LIImC9X3P/bcBLw7VCdNA mP0XQ4OlleLZWXUEW9EqR4QyM0RkPMoxXObfRgtGHKIkjZYXyGhUOd7MxRM8DBzN yieFf3CjZNADQnNBk/ZWRdJrpq8J1W0dNKI7IUW2yCyfdgnPAkX/lyIqw4ht5UxF VGrva3PoepPir0TeKP3M0BMxpsxYSVOdwcsnkMzMlQ7TOJlsEdtKQwxjV6a1vH+t k4TpR4aG8fS7ZtGzxcxPylhndiiRVwdYitr5nKeBP69aWH9uLcpIzplXm4DcusUc Bo8KHz+qlIjs03k8hRfqYhUGB96nK6TJ0xS7tN83WUFQXk29fWkXjQSp1Z5dNCcT sWQBTxWxwYyEI8iGErH2xnok3HTyMItdCGEVBBhGOs1uCHX3W3yW2CooWLC/8Pia qgss3V7m4SHSfl4pDeZJcAPiH3Fm00wlGUslVSziatXW3499f2QdSyNDw6Qc+chK hUFflmAaavtpTqXPk+Lzvtw5SSW+iRGmEQICKzD2chpy05mW5v6QUy+G29nchGDD rrfpId2Gy1VoyBx8FAto4+6BOWVijrOj9Boz7098huotDQgNoEnidvVdsqP+P1RR QJekr97idAV28i7iEOLd99d6qI5xRqc3/QsV+y2ZnnyKB10uQNVPLgUkQljqN0wP XmdVer+0X+aeTHUd1d64fcc6M0cpYefNNRCsTsgbnWD+x0rjS9RMo+Uosy41+IxJ 6qIBhNrMK6fEmQoZG3qTRPYYrDoaJdDJERN2E5yLxP2SPI0rWNjMSoPEA/gk5L91 m6bToM/0VkEJNJkpxU5fq5834s3PleW39ZdpI0HpBDGeEypo/t9oGDY3Pd7JrMOF zOTohxTyu4w2Ql7jgs+7KbO9PH0Fx5dTDmDq66jKIkkC7DI0QtMQclnmWWtn14BS KTSZoZekWESVYhORwmPEf32EPiC9t8zDRglXzPGmJAPISSQz+Cc9o1ipoSIkoCCh 2MWoSbn3KFA53vgsYd0vS/+Nw5aUksSleorFns2yFgp/w5Ygv0D007k6u3DqyRLB W5y6tJLvbC1ME7jCBoLW6nFEVxgDo727pqOpMVjGGx5zcEokPIRDMkW/lXjw+fTy c6misESDCAWbgzniG/iyt77Kz711unpOhw5aemI9LpOq17AiIbjzSZYt6b1Aq7Wr aB+C1yws2ivIl9ZYK911A1m69yuUg0DPK+uyL7Z86XC7hI8B0IY1MM/MbmFiDo6H dkfwUckE74sxxeJrFZKkBbkEAQRgYw7SAR+gvktRnaUrj/84Pu0oYVe49nPEcy/7 5Fs6LvAwAj+JcAQPW3uy7D7fuGFEQguasfRrhWY5R87+g5ria6qQT2/Sf19Tpngs d0Dd9DJ1MMTaA1pc5F7PQgoOVKo68fDXfjr76n1NchfCzQbozS1HoM8ys3WnKAw+ Neae9oymp2t9FB3B+To4nsvsOM9KM06ZfBILO9NtzbWhzaAyWwSrMOFFJfpyxZAQ 8VbucNDHkPJjhxuafreC9q2f316RlwdS+XjDggRY6xD77fHtzYea04UWuZidc5zL VpsuZR1nObXOgE+4s8LU5p6fo7jL0CRxvfFnDhSQg2Z617flsdjYAJ2JR4apg3Es G46xWl8xf7t227/0nXaCIMJI7g09FeOOsfCmBaf/ebfiXXnQbK2zCbbDYXbrYgw6 ESkSTt940lHtynnVmQBvZqSXY93MeKjSaQk1VKyobngqaDAIIzHxNCR941McGD7F qHHM2YMTgi6XXaDThNC6u5msI1l/24PPvrxkJxjPSGsNlCbXL2wqaDgrP6LvCP9O uooR9dVRxaZXcKQjeVGxrcRtoTSSyZimfjEercwi9RKHt42O5akPsXaOzeVjmvD9 EB5jrKBe/aAOHgHJEIgJhUNARJ9+dXm7GofpvtN/5RE6qlx11QGvoENHIgawGjGX Jy5oyRBS+e+KHcgVqbmV9bvIXdwiC4BDGxkXtjc75hTaGhnDpu69+Cq016cfsh+0 XaRnHRdh0SZfcYdEqqjn9CTILfNuiEpZm6hYOlrfgYQe1I13rgrnSV+EfVCOLF4L P9ejcf3eCvNhIhEjsBNEUDOFAA6J5+YqZvFYtjk3efpM2jCg6XTLZWaI8kCuADMu yrQxGrM8yIGvBndrlmmljUqlc8/Nq9rcLVFDsVqb9wOZjrCIJ7GEUD6bRuolmRPE SLrpP5mDS+wetdhLn5ME1e9JeVkiSVSFIGsumZTNUaT0a90L4yNj5gBE40dvFplW 7TLeNE/ewDQk5LiIrfWuTUn3CqpjIOXxsZFLjieNgofX1nSeLjy3tnJwuTYQlVJO 3CbqH1k6cOIvE9XShnnuxmiSoav4uZIXnLZFQRT9v8UPIuedp7TO8Vjl0xRTajCL PdTk21e7fYriax62IssYcsbbo5G5auEdPO04H/+v/hxmRsGIr3XYvSi4ZWXKASxy a/jHFu9zEqmy0EBzFzpmSx+FrzpMKPkoU7RbxzMgZwIYEBk66Hh6gxllL0JmWjV0 iqmJMtOERE4NgYgumQT3dTxKuFtywmFxBTe80BhGlfUbjBtiSrULq59np4ztwlRT wDEAVDoZbN57aEXhQ8jjF2RlHtqGXhFMrg9fALHaRQARAQABiQQZBBgBCgAPBQJg Yw7SAhsMBQkFo5qAAAoJEJxtzRcoPkVMdigfoK4oBYoxVoWUBCUekCg/alVGyEHa ekvFmd3LYSKX/WklAY7cAgL/1UlLIFXbq9jpGXJUmLZBkzXkOylF9FIXNNTFAmBM 3TRjfPv91D8EhrHJW0SlECN+riBLtfIQV9Y1BUlQthxFPtB1G1fGrv4XR9Y4TsRj VSo78cNMQY6/89Kc00ip7tdLeFUHtKcJs+5EfDQgagf8pSfF/TWnYZOMN2mAPRRf fh3SkFXeuM7PU/X0B6FJNXefGJbmfJBOXFbaSRnkacTOE9caftRKN1LHBAr8/RPk pc9p6y9RBc/+6rLuLRZpn2W3m3kwzb4scDtHHFXXQBNC1ytrqdwxU7kcaJEPOFfC XIdKfXw9AQll620qPFmVIPH5qfoZzjk4iTH06Yiq7PI4OgDis6bZKHKyyzFisOkh DXiTuuDnzgcu0U4gzL+bkxJ2QRdiyZdKJJMswbm5JDpX6PLsrzPmN314lKIHQx3t NNXkbfHL/PxuoUtWLKg7/I3PNnOgNnDqCgqpHJuhU1AZeIkvewHsYu+urT67tnpJ AK1Z4CgRxpgbYA4YEV1rWVAPHX1u1okcg85rc5FHK8zh46zQY1wzUTWubAcxqp9K 1IqjXDDkMgIX2Z2fOA1plJSwugUCbFjn4sbT0t0YuiEFMPMB42ZCjcCyA1yysfAd DYAmSer1bq47tyTFQwP+2ZnvW/9p3yJ4oYWzwMzadR3T0K4sgXRC2Us9nPL9k2K5 TRwZ07wE2CyMpUv+hZ4ja13A/1ynJZDZGKys+pmBNrO6abxTGohM8LIWjS+YBPIq trxh8jxzgLazKvMGmaA6KaOGwS8vhfPfxZsu2TJaRPrZMa/HpZ2aEHwxXRy4nm9G Kx1eFNJO6Ues5T7KlRtl8gflI5wZCCD/4T5rto3SfG0s0jr3iAVb3NCn9Q73kiph PSwHuRxcm+hWNszjJg3/W+Fr8fdXAh5i0JzMNscuFAQNHgfhLigenq+BpCnZzXya 01kqX24AdoSIbH++vvgE0Bjj6mzuRrH5VJ1Qg9nQ+yMjBWZADljtp3CARUbNkiIg tUJ8IJHCGVwXZBqY4qeJc3h/RiwWM2UIFfBZ+E06QPznmVLSkwvvop3zkr4eYNez cIKUju8vRdW6sxaaxC/GECDlP0Wo6lH0uChpE3NJ1daoXIeymajmYxNt+drz7+pd jMqjDtNA2rgUrjptUgJK8ZLdOQ4WCrPY5pP9ZXAO7+mK7S3u9CTywSJmQpypd8hv 8Bu8jKZdoxOJXxj8CphK951eNOLYxTOxBUNB8J2lgKbmLIyPvBvbS1l1lCM5oHlw WXGlp70pspj3kaX4mOiFaWMKHhOLb+er8yh8jspM184= =5a6T -----END PGP PUBLIC KEY BLOCK----- If you have problems viewing this email, you can view it as a web page. To view the mobile-friendly web page click here [ https://sites-gmf.vuturevx.com/email_handler.aspx?sid=0fa85ed9-cd5d-4727-907f-062b013bb104&redirect=https%3a%2f%2fsites-gmf.vuturevx.com%2f85%2f1338%2fmay-2015%2ftransatlantic-take--how-euro-area-deepening-can-reduce-the-risk-of-brexit.asp ] Our Organization Our Work Our Events Our Experts Support GMF How Euro Area Deepening Can Reduce the Risk of Brexit Daniela Schwarzer May 29, 2015 BERLIN—While British Prime Minister David Cameron is travelling Europe from The Hague to Paris, from Warsaw to Berlin to kick off negotiations on Britain’s relationship with the EU, German and French political leaders are working behind the scenes on how to deepen the euro area. In a recently leaked joint letter [ https://sites-gmf.vuturevx.com/email_handler.aspx?sid=0fa85ed9-cd5d-4727-907f-062b013bb104&redirect=http%3a%2f%2fwww.lemonde.fr%2feurope%2farticle%2f2015%2f05%2f25%2fle-front-commun-de-merkel-et-hollande-face-a-cameron_4639952_3214.html ] addressed to European Commission President Jean Claude Juncker, French President François Hollande and German Chancellor Angela Merkel argue for a deepening of the euro area without a change of the EU Treaty. This leaked letter was widely interpreted as a rebuff to Cameron, telling him there will be no treaty change to accommodate British interests to renegotiate the EU — or at least, British membership — ahead of the British referendum planned for 2017. But the Franco-German initiative is actually more about the risk of Grexit (a Greek exit from the euro area) than Brexit (a British one from the EU), and it might even help Cameron, if only indirectly. It is true that Paris and Berlin have made their reservations about treaty change clear and they did so well before the leaked letter. The motivation behind this Franco-German initiative, though, is not about the U.K.. It is about the euro area, which still faces serious fragilities: in political, economic, social, and financial terms. This is as much a question of policy as it is of architecture. With regards to policy, the euro area struggles to get some of its most badly hit regions and countries back on track for economic growth, employment, and sustainable public finances. On questions of architecture, the governance mechanisms for economic and budgetary policy coordination are not nearly robust enough, and the overall governance set-up lacks democratic legitimacy. Moreover, there are good arguments to complete the Banking Union and to equip the monetary union with stronger tools to manage financial crises and a fiscal capacity. All this has been known for a while, and yet the political process to improve the governance set-up of the euro area has stalled for almost two years. In summer 2013, when the European Central Bank announced its “we’ll do what it takes” policy of buying potentially unlimited amounts of sovereign bonds (known as the Outright Monetary Transactions program), markets calmed down and policymakers relaxed. They no longer saw a pressing need to pursue the process of deepening the euro area further, which has already advanced so much that it touches upon sensitive questions of sovereignty, EU interference, financial solidarity, and risk sharing. In 2015, two factors combined to bring renewed impetus to the debate on euro area deepening. The show-down with Greece on its debt payments and the non-negligible danger of a Grexit is one factor. The other is the new EU leadership with an entrepreneurial Commission president deeply familiar with all the core weaknesses of the currency union after spending eight years chairing the Eurogroup (the meeting of finance ministers of the euro area). At the European Summit on June 24-25, 2015, a second report on euro area deepening by the four presidents of the European Commission, the euro area, the European Central Bank, and the European Council will be presented. The first one, “Towards a Genuine Economic and Monetary Union [ https://sites-gmf.vuturevx.com/email_handler.aspx?sid=0fa85ed9-cd5d-4727-907f-062b013bb104&redirect=http%3a%2f%2fwww.consilium.europa.eu%2fuedocs%2fcms_Data%2fdocs%2fpressdata%2fen%2fec%2f134069.pdf ] ” contained far reaching suggestions for further integration in the field of financial, economic, and budgetary policy as well as proposals how to improve democracy and legitimacy. This time around, in particular following the Franco-German initiative, it is less likely that this report will simply be shelved like the previous one was two years ago. Although a big leap forward with a substantive transfer of competencies is unlikely, the eurozone will make moves to grow closer. The risk of a Grexit is accelerating these dynamics, firstly, because the conflict with Greece has pushed the others closer together and strengthened joint perceptions about governance deficiencies, and secondly, because euro area countries know they may have to restore credibility and strengthen the euro if it is to survive a Grexit. Cameron can but watch this happening from the margins of the EU. It is now clear that there will be no big treaty revision and no intergovernmental conference that would simultaneously debate a deepening for the euro area while loosening the U.K.’s membership. Cameron’s claims that he will renegotiate and change the EU are illusionary. While the new Franco-German initiative is not targeted at Cameron, it could politically suit him. If the political deepening of the euro area moves ahead, Cameron will be able to argue at home that the U.K. is much less integrated into the EU than the core countries are — currency-wise, institutionally, politically, and also in terms of risk sharing and financial solidarity. So while Cameron might not be able to reshape the EU according to British ideas, a Franco-German reshaping of the euro area could help him rebrand British EU membership by default. DISCUSS [ https://sites-gmf.vuturevx.com/email_handler.aspx?sid=0fa85ed9-cd5d-4727-907f-062b013bb104&redirect=http%3a%2f%2fwww.gmfus.org%2fblog%2f2015%2f05%2f28%2fhow-euro-area-deepening-can-reduce-risk-brexit ] Dr. Daniela Schwarzer [ https://sites-gmf.vuturevx.com/email_handler.aspx?sid=0fa85ed9-cd5d-4727-907f-062b013bb104&redirect=http%3a%2f%2fwww.gmfus.org%2fprofiles%2fdaniela-schwarzer ] is GMF’s Senior Director for Research and Director of the Europe Program. Follow her on Twitter @D_Schwarzer [ https://sites-gmf.vuturevx.com/email_handler.aspx?sid=0fa85ed9-cd5d-4727-907f-062b013bb104&redirect=https%3a%2f%2ftwitter.com%2fd_schwarzer ] . The views expressed in GMF publications and commentary are the views of the author alone. Policy [ https://sites-gmf.vuturevx.com/email_handler.aspx?sid=0fa85ed9-cd5d-4727-907f-062b013bb104&redirect=http%3a%2f%2fwww.gmfus.org%2fgmf-pillar%2fpolicy ] Policy [ https://sites-gmf.vuturevx.com/email_handler.aspx?sid=0fa85ed9-cd5d-4727-907f-062b013bb104&redirect=http%3a%2f%2fwww.gmfus.org%2fgmf-pillar%2fpolicy ] Leadership [ https://sites-gmf.vuturevx.com/email_handler.aspx?sid=0fa85ed9-cd5d-4727-907f-062b013bb104&redirect=http%3a%2f%2fwww.gmfus.org%2fgmf-pillar%2fleadership ] Leadership [ https://sites-gmf.vuturevx.com/email_handler.aspx?sid=0fa85ed9-cd5d-4727-907f-062b013bb104&redirect=http%3a%2f%2fwww.gmfus.org%2fgmf-pillar%2fleadership ] Civil Society [ https://sites-gmf.vuturevx.com/email_handler.aspx?sid=0fa85ed9-cd5d-4727-907f-062b013bb104&redirect=http%3a%2f%2fwww.gmfus.org%2fgmf-pillar%2fcivil-society ] Civil Society [ https://sites-gmf.vuturevx.com/email_handler.aspx?sid=0fa85ed9-cd5d-4727-907f-062b013bb104&redirect=http%3a%2f%2fwww.gmfus.org%2fgmf-pillar%2fcivil-society ] Follow Strengthening Transatlantic Cooperation Our Organization About GMF Career Opportunities Press Room Our Work Leadership Policy Civil Society Research & Analysis Transatlantic Academy Our Events Major Conferences & Forums Recent & Upcoming Events Our Experts Find an Expert Manage preferences  | Forward email  | Unsubscribe  | Subscribe