Merkel’s Would-Be Heir Softens Tone on Future EU Fiscal Policy

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Armin Laschet, the front-runner to become Germany’s next chancellor, signaled he might pursue a softer line on fiscal policy in the European Union than Angela Merkel, a noticeable change of tone from a week ago.

After Merkel’s last big policy speech in parliament on Thursday, Laschet attacked Austria, Denmark, the Netherlands and Sweden for being too tight-fisted on EU spending. These fiscally conservative member states “for a long time had the calculator as a concept and not the European vision,” he said.

Merkel’s Would-Be Heir Softens Tone on Future EU Fiscal Policy

The 60-year-old leader of the Christian Democrats praised the initiative by Merkel and French President Emmanuel Macron for an EU recovery fund, which is funded by joint debt -- a taboo for Germany in the past.

“It’s good that Chancellor Merkel and President Macron went ahead and in the end also convinced the others,” Laschet said. “It’s certainly better than if the four would have moved ahead and the others would have followed them.”

The candidate for Germany’s conservative bloc -- which is leading in the polls -- also distanced himself from the term “Mediterranean fiscal policy,” which was coined by German critics of the EU recovery fund and is widely understood to refer to countries like Italy and Greece.

“It doesn’t help the continent to describe European fiscal policy with such categories and adjectives,” Laschet said.

The comments are significantly softer than his position in an interview with Bloomberg last week, when he called for EU budget rules to be reinstated once the pandemic has subsided.

“When this crisis is over, when its effects on the global economy are over, German as well as European politics will have to return to the stability policies as defined in the Maastricht Treaty,” Laschet said on June 17.

Italian Prime Minister Mario Draghi -- the former head of the European Central Bank who helped save the euro during the financial crisis -- pushed back on Wednesday, saying euro-area fiscal rules can’t return to how they were.

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