Germany's new Finance Minister Christian Lindner has today underlined Berlin's readiness to reform the European Union's fiscal rules and find ways to strengthen the bloc's finance sector by completing its banking union.
Mr Lindner was speaking to reporters ahead of a meeting with Paschal Donohoe, head of the Eurogroup of euro zone finance ministers.
He said he wanted the EU to focus on the recovery from the pandemic by implementing its debt-financed, €750 billion recovery fund, called Next Generation EU.
"We're responsible to make a success out of this. I think it's more important than the debate on the fiscal rules," said Lindner, leader of the fiscally cautious Free Democrats (FDP), junior party in Chancellor Olaf Scholz three-party coalition.
But Lindner stressed that Germany's new coalition government wanted to play a constructive role in the debate about how to further develop the EU's fiscal rules, known as the Stability and Growth Pact.
In their coalition deal, Scholz's Social Democrats, FDP and the Greens agreed that any reform of the rules should aim to guarantee growth, maintain debt sustainability and ensure climate-friendly investments.
They want to simplify the rules to improve enforcement.
Asked if Germany continued to resist a cross-border mechanism to protect bank deposits, Lindner said Berlin was ready to talk about the creation of a European deposit reinsurance scheme.
"And so we are open for progress. But we have to make progress in other aspects too, for example the question of the bank-sovereign-nexus," Lindner said.
He was referring to the high concentration of bonds of a single sovereign in the balance sheets of banks in the same country.
"So it's a lot to discuss. But we are open for progress - and we won't waste the crisis," Lindner said, echoing a line attributed to Winston Churchill that one should never let a good crisis go to waste in challenging the status quo.
Completion of the banking union, which would mean setting up a controversial common deposit insurance scheme, would sharply reduce the possibility of a major banking crisis in the 19 countries sharing the euro and in this way boost market confidence in the euro and demand for the currency.
But the issue is highly sensitive in several euro zone countries and euro zone finance ministers together with their non-euro colleagues from other EU countries have been stuck trying to agree on the deposit guarantee scheme for years.
Italy, whose banks have significant holdings of domestic government bonds, has opposed earlier proposals to limit the exposure of euro zone banks to debt of a single sovereign.
"I absolutely understand the national matters that Mr Lindner has raised in relation to the Banking Union project," Finance Minister Paschal Donohoe said.
"This is an immensely important, an immensely sensitive project. And it's my role to hear directly from Christian his views on this topic and bit by bit to identify ways in which we can make progress," Mr Donohoe added.
Euro zone finance ministers will discuss the reform of the bloc's fiscal rules and completion of the Banking Union at their next Eurogroup meeting in Brussels on January 17.
Finance Minister and President of the Eurogroup Paschal Donohoe is travelling to Berlin, Riga and Vilnius this week for a series of bilateral meetings.
The focus of the meetings will be the euro area economy and the Eurogroup's key priorities, including the economic governance of the European Union, the next steps in completing Banking Union and the future of the digital euro.
As well as meeting the new German Minister for Finance in Berlin today, he was also due to meet with Vice-Chancellor and Minister for Economic Affairs and Climate Action Robert Habeck, and with Mathias Middelberg and Antje Tillmann from the CDU/CSU parliamentary group.
Minister Donohoe will travel to Latvia tomorrow to meet with the Latvian Finance Minister, Jānis Reirs. In Riga, Minister Donohoe will also participate in an online discussion on the challenges facing the euro zone this year with the President of the Bank of Latvia, Mārtiņš Kazāks.
On Wednesday, the Minister will then travel to Lithuania to meet with Finance Minister, Gintarė Skaistė.
Completion of the banking union, which would mean setting up a controversial common deposit insurance scheme, would sharply reduce the possibility of a major banking crisis in the 19 countries sharing the euro and in this way boost market confidence in the euro and demand for the currency.
But the issue is highly sensitive in several euro zone countries and euro zone finance ministers together with their non-euro colleagues from other EU countries have been stuck trying to agree on the deposit guarantee scheme for years.
Italy, whose banks have significant holdings of domestic government bonds, has opposed earlier proposals to limit the exposure of euro zone banks to debt of a single sovereign.
"I absolutely understand the national matters that Mr Lindner has raised in relation to the Banking Union project," Finance Minister Paschal Donohoe said.
"This is an immensely important, an immensely sensitive project. And it's my role to hear directly from Christian his views on this topic and bit by bit to identify ways in which we can make progress," Mr Donohoe added.
Euro zone finance ministers will discuss the reform of the bloc's fiscal rules and completion of the Banking Union at their next Eurogroup meeting in Brussels on January 17.
Finance Minister and President of the Eurogroup Paschal Donohoe is travelling to Berlin, Riga and Vilnius this week for a series of bilateral meetings.
The focus of the meetings will be the euro area economy and the Eurogroup's key priorities, including the economic governance of the European Union, the next steps in completing Banking Union and the future of the digital euro.
As well as meeting the new German Minister for Finance in Berlin today, he was also due to meet with Vice-Chancellor and Minister for Economic Affairs and Climate Action Robert Habeck, and with Mathias Middelberg and Antje Tillmann from the CDU/CSU parliamentary group.
Minister Donohoe will travel to Latvia tomorrow to meet with the Latvian Finance Minister, Jānis Reirs. In Riga, Minister Donohoe will also participate in an online discussion on the challenges facing the euro zone this year with the President of the Bank of Latvia, Mārtiņš Kazāks.
On Wednesday, the Minister will then travel to Lithuania to meet with Finance Minister, Gintarė Skaistė.
He will also make courtesy calls to the President of Lithuania, Gitanas Nausėda, and the Prime Minister, Ingrida Šimonytė.
