Monday, June 3, 2013

Merkel reins in plan to transfer powers to Brussels

German Chancellor Angela Merkel has come out against handing the European Commission more powers, in the clearest sign yet that she is reining in her ambitions to create a "fiscal union" in which euro members cede control of their budgets to Brussels.

The comments, made in an interview with weekly Der Spiegel, come days after Merkel held talks with President Francois Hollande in Paris and the two unveiled joint proposals for the future shape of the euro area, including the creation of a permanent president of the Eurogroup forum of finance ministers.

Merkel spoke out strongly in favor of closer fiscal integration last year, but France and some other euro members have deep doubts about ceding sovereignty -- a step which would require politically sensitive changes to the EU treaty -- and Berlin appears to have realized that this resistance is too great to overcome for now.