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After more than four years in which Berlin and other capitals are reluctant to reform the Eurozone, the European Commission will give a sullen assessment of the results achieved.
Brussels will review on Wednesday the progress of the EU in the implementation of the "Five Presidents Report" – a document that the European Commission unveiled in 2015 with great interest, marking the course to "Complete Europe's Economic and Monetary Union" by 2025 should set.
Things did not go as planned. The idea of a "fiscal union" with a "treasury of the euro area" remains an object of political imagination. The ambition to complete the euro area system known as banking union to tackle financial crises was not met.
It is this tone of disappointment and even reproach that runs through much of the inventory paper that will be adopted by the commission on Wednesday and to which the FT has become accustomed.
Brussels will warn that "the hard-won achievements of the last 10 years are at stake".
"It is time to break with deadlock and revive our collective ambitions," the Commission says. It sounds like a nervous architect and emphasizes that "important elements in the overall design are still missing".
What went wrong? On the one hand, the report of the five presidents shot for the moon. Just as political fatigue set in after years of fighting the crisis, the report pushed the hesitant capitals into uncomfortable directions and urged them to adopt new types of bailout funds and help bank depositors in other countries.
The report was a Brussels creation – created by Commission President Jean-Claude Juncker "in close collaboration" with the heads of the other EU institutions, including the capitals. It provided a complete vision at a time when some very clear priorities were likely to be there.
Following the publication, the Commission set out to implement it in a way that angered national governments. The plans to turn the euro area bailout fund, the European Stability Mechanism, into an official EU institution sparked fears that Brussels might be in power.
The Commission has also repeatedly put forward plans for a "European safe asset", a type of counterfeit Eurobond that is detested in Germany and receives no support from other capitals.
Finally, other leaders came up with their own ideas – notably French President Emmanuel Macron and his strong focus on creating a euro area budget – making it more difficult to develop a set and coherent agenda.
Not everything is dark. The report notes that the EU has agreed on important steps to increase its financial clout in dealing with bank failures, and has made serious progress in streamlining bank balance sheets. The Heads of State and Government also reached an agreement in December on upgrading the ESM.
EU finance ministers will meet in Luxembourg this week to discuss the key pieces of the euro reform puzzle – including the Banking Union and the eurozone budget.
It is also a topic that will not disappear. The report makes it particularly clear to what extent the euro reform is linked to basic EU objectives.
Assume the EU's goal of turning the euro into an international reserve currency that can keep up with the US dollar – a project that has dwarfed the political agenda in response to Donald Trump. The Commission's paper underlines that completing the Banking Union is "essential" for achieving this goal, as this would increase investor confidence in the stability of the single currency.
Ultimately, the Commission's message is that efforts to grow EU capital markets, strengthen financial stability and promote the euro globally are mutually reinforcing and closely linked.
The discussions on Euro reform may be slow, but they will not stop.
Chart du jour: The Saarland is Karland
The German heartland of the automotive industry expects the impending revolution of cleaner cars. Some predict that the revolutionary shift to electric and hybrid vehicles will create R & D jobs in the region. Others fear that many of the 44,000 local auto-manufacturing jobs will disappear over the next decade: "Coal and steel are nothing compared to what Saarland has to offer." (FT)
The first Scottish minister, Nicola Sturgeon, met with EU Brexit leader Michel Barnier and Commission President Jean-Claude Juncker in Brussels on Tuesday. In a conversation with the FT, the nationalist leader said that the risks of Brexit are increasing without agreements and that the remaining parties in the UK have to band together to tackle it.
"We are in this situation where, in my opinion, the possibility of a second referendum, which at least gives rise to a residual decision, is greater than before, but also the risk that no agreement will be reached," she said. "And those of us who want to see the former have to stand behind it, and that means, honestly, that Labor will fall off the fence."
Ms Sturgeon said that Brexit in EU capitals "provides a deeper understanding of why Scotland may want to be independent," compared to 2014 when the Scottish referendum took place. "The mood here compared to 2014 on this issue is like day and night," she said.
The Juncker effect
The outgoing President of the European Commission, Jean-Claude Juncker, was in good shape on Tuesday in a comprehensive interview with Florian Eder of Politico. Highlights: that the British Brexit deal will not be renegotiated; that he would have preferred to secure Donald Tusk's job as President of the European Council in 2014, as he believes that this is less burdensome; and that there are too many EU Commissioners.
The outgoing EU chief also admitted a number of regrets, ranging from the patchy progress of the EU in the euro reform to the failure of efforts to reunify Cyprus. He called on EU leaders to refrain from "nasty comments" on Donald Trump.
Martin Wolf of the FT is considering what he thinks is the most important issue for EU leaders this year: who should be appointed President of the European Central Bank? (FT) Should it be Jens Weidmann, the Bundesbank president?
In short, Germany was a big economic beneficiary of the euro. Mr Weidmann, who said this time and time again and strongly supported the ECB's actions, could have made a big difference to Eurozone policy. Unfortunately, such a Mr. Weidmann has not been proven. Instead, he has represented the skeptical German view and thus confirmed. If he did that as president, it would be a disaster. If he took the broader view, it would be a blessing. This and not his nationality is the problem. There can be no objection to a German president. On the contrary, a realistic and sensible German President would be a great blessing.
An early index for economic activity in June shows that the export-dependent German economy has slipped back into negative territory for the first time in nine years – affected by the US-Chinese trade dispute and the problems of the automotive industry. (FT)
Despite strong opposition from Bucharest, former Romanian anti-corruption leader Laura Codruţa Kövesi has pledged to fight "to the last second" to become the EU's first public prosecutor. (Politico)
Money money money
Writer Rebecca Spang adds a historical perspective to Rome's idea of creating a mini-BOT currency – low interest denomination treasury bills. (FT)
The term "siege money" describes currencies that have been issued in times of crisis and are only intended for a short circulation. It's too early to know if mini-BOTs are money, siege money, or nothing at all, but the time for a new, fairer version of the money seems obvious.
Commission President Jean-Claude Juncker has offered to Bern in writing to clarify his draft agreement with Switzerland, but claims that there can be no renegotiation. (Reuters)
Macron relies on Merkel
French President Emmanuel Macron said that if German Chancellor Angela Merkel wanted to be the next president of the European Commission, she would have his support. (RTS)
A new DNA study has shown that Pinot Noir, Syrah and a number of other grapes have hardly changed since Roman times. (NYT)