Europe is arguing about money again

The French and German Finance Ministers announced the creation of eurozone finance minister and budget. The zone involves countries that have officially introduced the Euro. The reform will lead to a more rapid development of the eurozone countries in comparison with the states that will remain on the European periphery, RISS expert Oksana Petrovskaya said. She added that the funds of the single eurozone budget will primarily be invested in innovative development, various researchments, and human capital.

The reform assumes that the new "moneybox" will become a part of the EU budget. Countries that are belonging to the eurozone will invest in the EU budget. Accordingly, the funds will be allocated only between these states.

RISS expert noted that Brexit has led to the fact that 85% of the total European GDP is created in the eurozone. At the same time, only Bulgaria, Romania, and Croatia are seeking to join the eurozone, while Poland and Hungary do not plan to change their national currency in the near future.

The reason for this is that countries outside the eurozone lag behind the leading states in terms of the economy. That is why they do not want to switch to the European currency: it will have a negative impact on their economy.

The analyst stressed that a number of countries including the Netherlands believe that there is no need for a separate budget. The French Finance Minister has already invited his Dutch counterpart to Paris for talks on this issue. RISS expert has no doubt that as a result of the discussion, the initiators of the innovation – France and Germany – will achieve the agreement of doubting Holland and Finland.

The EU countries can not even agree on the amounts of financing yet. "The debates were very hot. The budget has not been adopted at the moment. At the same time, the European Parliament proposed a budget of 149.3 billion euros, just over a billion more than the member states. Meanwhile, the budget issues are very complex and the most conflict among the EU member states. The matter is about money, and each country strictly protects its own interests. Disputes will escalate," the analyst concluded.

Europe economics