François Fillon, the front-runner in next May's French presidential elections, has a plan to secure the euro, and to make the euro area the hard core of a united "Europe of nations."
Mr. Fillon is making a bold attempt to reassert the French leadership in European affairs, and to stop the advance of the hard-right Front National, whose anti-European Union (EU) leader, Marine Le Pen, is widely seen as a force to reckon with in the second round of a contest on May 7, 2017.
This sounds like a great piece of statecraft, but why is it that Mr. Fillon's proposed euro area reforms are "dead on arrival in Berlin?" There are two key issues.
First, Mr. Fillon wants to establish an economic (and political) government of the euro area as a counterweight to the German-built European Central Bank (ECB), which is solely responsible for price stability and for the regulatory and supervisory functions in the monetary union. The new body, proposed by Mr. Fillon, would consist of the heads of government, with its own secretariat, and would be independent of the EU Commission in Brussels.
No kidding, says Berlin. The Germans see that as a long-standing French gambit to bring the ECB under some sort of political control by a top level "economic government." Germans don't want that. They prefer the current "economic government" -- an informal forum of euro area finance ministers called the Eurogroup, where they control the agenda and the proceedings.