UK plans could be part of new EU treaty, says French minister

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Britain’s plans to create new relationship with the European Union could be coordinated with far-reaching EU treaty changes to create an integrated eurozone, the controversial reforming French economics minister has said.

This would be a win-win for Britain and France, Emmanuel Macron told the Guardian in an interview, but he said it depended on the precise details of what Britain was proposing.

Macron said he expected treaty change to integrate the eurozone after the French and German elections in 2017: “If it is acceptable there is a good chance the British proposals could altogether be part of a treaty package,” he said. “But the prior condition for me clearly is to have precise proposals from the British side in order to see what is acceptable and how it would comply”. He warned Britain could not expect to be allowed an “à la carte” Europe.

The former banker, who is a favourite of President François Hollande, is pushing through at lightning speed the most painful reforms to the heavily regulated French economic system since the second world war making him one of the continent’s most controversial yet dynamic figures. With Paris frequently accused of failing to show leadership in comparison with German leader Angela Merkel, Macron is rapidly filling the void.

In a bold initiative in the summer Macron co-authored an article with the German SDP’s Sigmar Gabriel setting out plans to integrate the economic governance of eurozone structure, with a eurozone commissioner, resource transfers and oversight by the European parliament.

George Osborne has said if the eurozone becomes more tightly integrated then settling the tensions between it and and those EU members outside the single currency is perhaps the single most important issue in the renegotiations before the UK’s planned in/out referendum.

Macron said: “If it is about articulating the rights of in and out [of the eurozone] countries then … it depends exactly on what your government wants. We can share the agenda of cutting red tape and enhancing competitiveness. My view is we can find a fair solution but without excessive requirements, as we have been able to do in the past. I think there is a win-win option that improves the functioning of the EU and helps to get a positive vote for the UK to be part of the EU club.

“But we have to fine tune expectations and requirements In any case we cannot create a sort of EU a la carte which is not consistent with something more ambitious. To have something that is more flexible, more efficient and which is completely consistent with our strategy.

“When we created the banking union we created rights for the outs without a lot of difficulty. My view is we can find a fair solution but without excessive requirements. I think there is a win win option that improves the functioning of the EU and leads to be a positive vote for you to be part of the EU club.”

Discussing his efforts to reform the French economy Macron said they needed “a new momentum for Europe and the euro” by creating a eurozone budget, a eurozone commission and a eurozone parliament.

He said: “We need more integration at the eurozone level. Why? Because the eurozone on its own just creates divergence. If we don’t reform we are deciding de facto the dismantling of the eurozone. ... If there is a very productive centre, it just attracts all the energy to the centre and kills the periphery , and even if they try to do their best to recover, it is hard without investment and transfers.”

Macron added: “I am sure it will require treaty change and if we are sensible for sure we have to wait until after the French and German elections in 2017 because there is no chance we will propose a treaty change one year before the elections..”

With French unemployment struck at 10%, and growth due to reach 1.5%, Hollande, still floundering in the polls, has risked much on Macron being able to turn round the economy in time for the presidential elections in 2017. He is pushing difficult change on every front – more flexible company-based labour laws, sunday trading, a £50bn public spending cut, tax breaks for innovation, and the break up of monopolies. Unit labour costs are already below those of the Germans, he claims.

He explained the need for such speed: “For me we have six to eight months to finalise labour market reforms and our reform for new economic opportunities and it is extremely important we push the debate as fast as we can. We need to do so for a very blunt reason the only way to succeed at the next election is to deliver and get results by then. Half-pregnant is not a concept.”

Despite the criticism from the Socialist party’s left and the very different course being charted by Jeremy Corbyn in Britain, he said: “I do believe what we are undertaking is the modernisation of the software of the Socialist party. We never experienced in France the equivalent of Bad Godesberg [the German revision of social democracy in 1959] or the revision of Labour’s clause 4. We have a different story. So what we are trying to do is ... not just as an imitation of the third way but something brand new. The aim is to reinvent what it is to be progressive today, to be more open to globalisation. But the outcome of our policy cannot just be to reduce regulation.

“What we built right after the second world war is no longer adapted to this new economy and that makes this disruption necessary. What we have to invent is a new way to help people to take risks and at the same time to be concerned for equality, and the reform of education and health. That is a big modernisation of socialism because for some people the unique recipe was increasing public expenditure and correcting inequalities through tax.”

Powered by Guardian.co.ukThis article was written by Patrick Wintour Political editor, for theguardian.com on Thursday 24th September 2015 00.43 Europe/Londonguardian.co.uk © Guardian News and Media Limited 2010