European Commission president-elect Jean-Claude Juncker will hold talks with the various political groupings in the European Parliament as he seeks to develop policy positions. Most interesting would be indications about which way he is bending in the growth versus austerity debate.
Italy’s Matteo Renzi, resurgent after a strong performance in May’s EU elections, is pressing for a focus on measures to get the euro zone economy firing and has even managed to get Germany to talk the talk. But any leeway will be within the existing debt rules, not by writing new ones.
We know from the history of the euro debt crisis that Berlin can only move so far, so fast and only last week it proudly proclaimed it would not be a net borrower of zero next year, for the first time in over 45 years. Having said that it has just passed into law a generous national minimum wage and its labour costs are rising, so there is some rebalancing going on.
Euro zone finance ministers met in Brussels late yesterday and affirmed that EU countries can get more time to cut budget gaps provided they deliver reforms with a clear long-term impact. A similar pledge was made by EU leaders at a summit last month.
Juncker is first and foremost a dealmaker so – contrary to his popular billing as the wrong man at the wrong time – he could bring his skills to bear to get everyone on the same page.