By Andrea Thomas
BERLIN--German Finance Minister Wolfgang Schäuble called Tuesday for the eurozone's bailout fund to assume a
watchdog role over countries' budgets, saying the euro will only be regarded as a trustworthy currency if member
countries respect self-imposed rules.
"The European rescue system has been successful in Portugal, Ireland, Spain, Cyprus, and also in Greece," he said
during a speech to a conservative think tank, noting that the countries might not have liked the conditions attached,
but they had to accept them.
Mr. Schäuble has repeatedly said political motives play too big a role in how member states' budget plans are
considered by the European Commission.
Earlier this year, the commission gave France leeway on its budget plans, a move that angered Berlin. Brussels gave
Paris more time to bring its budget deficit in line with European budget rules, even though these would have required
the country to implement more austerity measures than planned.
Germany is one the strongest proponents of applying budget rules requiring countries to keep their budget deficits
below 3% of gross domestic product and the national debt below 60% of GDP.
A single monetary union without a joint fiscal and economic policy "is incomplete," and in the absence of such a
joint policy, the eurozone "can only function if it has certain rules and sticks to these rules," Mr. Schäuble
said. "This isn't German stubbornness but is a result of the design, the peculiarity, of the monetary union."
While Mr. Schäuble has urged creation of a fiscal and economic policy union in Europe to strengthen the
eurozone, he has acknowledged that it is difficult to find unanimous backing for such integration.
In 2010, Mr. Schäuble appealed to set up a European Monetary Fund that would assume watchdog tasks and provide
struggling countries with emergency liquidity aid under strict conditions.
Instead, the eurozone got the International Monetary Fund on board to monitor bailout packages for Greece and other
The Washington-based IMF's supervisory role is one of the reasons Germany says it is "of vital importance" for it
to join the third Greek bailout package.
But the IMF said earlier in October it isn't likely to soon rejoin Europe in providing more financing for debt-worn
Greece, if at all, while in the midst of a disagreement with Berlin. The fund insists on additional debt relief for
Greece while Berlin wants to delay such a decision until 2018, once Greece has completed its economic overhaul and once
Germany's 2017 elections are out of the way.
Write to Andrea Thomas at firstname.lastname@example.org
(END) Dow Jones Newswires
Copyright (c) 2016 Dow Jones & Company, Inc.
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