EU laid bare: German memo showing ‘secret slide towards super-state’ revealed

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At the end of May, France and Germany announced they are backing the creation of an EU bond to raise €500billion (£447billion) to boost the European economy, severely weakened by the coronavirus pandemic. The two leaders, Emmanuel Macron and Angela Merkel, unveiled their proposal in a joint video press conference. If approved, it would be the first time the bloc has pooled its debt in this way.

The measure immediately raised objections from the Netherlands, Austria, Denmark and Sweden, known as the “Frugal Four”, who support the establishment of a one-off emergency fund but do not back debt sharing or a significant increase in the EU’s next seven-year budget.

However, the pressure that the pandemic poses on the EU as a whole might work in favour of the Franco-German joint proposal.

Andrew Watt, head of the unit for European economic policy at the Hans-Böckler Foundation, said: “The Frugals, on paper, have a fairly strong position in the sense that this whole thing is located within the European Union budget.

“In practice, though, none of them want to go down in the history books as the country that, faced with a pandemic, after all these countries have gone through, let them starve.”

The plan is, nonetheless, a huge turn-around move for normally fiscally cautious Germany, whose Chancellor has opposed similar proposals for years.

In 2011, Mrs Merkel’s plan to tackle the eurozone debt crisis was completely different.

According to a throwback report by The Telegraph , a leaked German government document showed that nine years ago the Chancellor wanted to set up an intrusive European body with the power to take over the economies of struggling nations.

The six-page memo, by the German Foreign Office, argued that Europe’s economic powerhouses should have been able to intervene in how beleaguered eurozone countries were run.

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The proposals wanted to see the European Stability Mechanism (ESM) transformed into a version of the International Monetary Fund for the EU.

The European Monetary Fund (EMF) would have been able to take full fiscal control of a failing country, including taking countries into receivership.

The leaked document, titled “The Future of the EU: Required Integration Policy Improvements for the Creation of a Stability Union”, came as former Prime Minister David Cameron met Angela Merkel in Berlin to talk about the eurozone crisis.

The plan started with the proposal to create “automatic sanctions” that could have been imposed on euro members spending beyond targets set by the European Commission.

If euro rules were “consistently violated”, the memo said, Brussels should have been able to demand action from the European Court of Justice.

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Germany, Finland, Austria and the Netherlands would have been able to ask EU courts to impose sanctions, from fines to the loss of budgetary sovereignty, to protect the euro.

The memo stated the EMF would have been given “real intervention rights” in the budgets of euro members who received EU-IMF bailouts.

According to The Telegraph’s Brussels correspondent Bruno Waterfield, the document heightened fears that Germany’s euro crisis plans could have resulted in a “European super-state”.

At the time, think tank Open Europe called for Mr Cameron to demand concessions from Mrs Merkel in exchange for the plans, which needed the consent of all 27 EU countries.

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