(Bloomberg) -- French President Emmanuel Macron dispatched his finance chief to Madrid this week to shore up support as his push for more euro-area integration runs into trouble.
Bruno Le Maire was the first European finance minister to visit new Spanish economy chief Roman Escolano on Thursday, as he sought to bind France’s southern neighbor into his boss’s campaign for a euro-zone budget to bolster the bloc against future crises.
“There isn’t even a cigarette paper between the French and Spanish positions,” Le Maire told reporters after lunch with Escolano and his team. He said he’ll include Spanish officials in discussions with the German government as they look to agree a road map for euro-area integration to present to European Union leaders at a summit meeting in June.
Spain will also support the French push for a euro-zone finance minister, a single deposit-guarantee fund to complete the banking union and tax harmonization, Escolano said later at an event. They aim to have a new tax regime for internet giants like Amazon.com Inc. and Facebook Inc. in force next year, according to Le Maire.
At one level, Macron is cashing the checks he earned last year with his implacable support for Spanish Prime Minister Mariano Rajoy’s battle to contain Catalan separatism. In February Le Maire also backed Spain’s successful push to secure the vice presidency of the European Central Bank for then Economy Minister Luis de Guindos and he went out of his way in Madrid to emphasize the credibility Spain has earned in resolving its financial crisis.
“France and Spain share the same view of the direction to follow,” Escolano said, introducing Le Maire to an audience in Madrid later Thursday.
Yet scratch a little deeper and the support for euro integration is not so fierce in Madrid, nor the stakes so high.
Rajoy will keep Macron at arm’s length, according to two Spanish officials familiar with his European strategy. The Spanish leader, like Germany’s Angela Merkel and France’s main opposition, the Republicans, is a member of Europe’s center-right political alliance while Macron has cultivated political ties with Rajoy’s centrist rivals Ciudadanos.
As resistance sprouts across much of the rest of the bloc, it’s Macron who’s staked his political capital on the initiative, and not Rajoy.
Macron was dubbed the “new leader of Europe” after his election victory last year -- celebrated with the European anthem “Ode to Joy” rather than France’s “La Marseillaise.” But putting that into practice is giving him a serious headache.
His vision for a decade of European integration, set out over an hour and 40 minutes at the Sorbonne University in Paris in September, has been effectively shelved before it even got off the runway due to a lack of support.
Now he’s focused on salvaging plans to complete banking union this year, just the first item on his list. That means overcoming concerns from Germany and other member states about the risks buried in the Italian banking system. If he misses the June deadline, the electoral timetable will turn against Macron as politicians’ concerns turn to the domestic battles in next year’s European parliamentary elections, Le Maire recognized Thursday.
Macron’s vow to expand banking union swiftly to include joint deposit insurance
is still facing a guarded response from Germany. Spain backs the project but
Macron’s other natural ally, the Democratic Party administration in Italy was
hammered in last month’s election and two euroskeptic parties are jostling to take over.
Belgium and Austria also offer support to France on some European plans, a
French official said. But faced with opposition from Germany, the Netherlands and Finland that won’t be enough.
Germany has held off endorsing Macron’s bolder proposals such as a
special euro-area finance chief while Mark Rutte of the Netherlands has led the
opposition to Macron. He said last month that strengthening the euro “requires
first and foremost decisive actions at the national level.”
“European countries have very different traditions,’’ Matthias Kullas, head of the economic and fiscal department at Centre for European Policy in Freiburg, Germany, wrote in a report this month. “Each side will fear that a euro-zone finance minister would favor the other side.”
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