At the same time, an EMF could be particularly welcomed in Germany. The biggest euro economy is one of the most critical of the European Commission’s work as a fiscal authority – the EU’s executive arm is responsible for tracking countries’ compliance with deficit and debt rules, but despite several deviations across the region, the commission has never imposed fines.
“Beneath the surface, I think there is frustration in many circles that support the EMF proposal with the political nature of the European Commission,” Erik Jones, professor of European studies at John Hopkins University, told CNBA via email.
This is because the ESM could, as part of the upcoming proposals, include powers to act as a fiscal authority on the countries of the euro. Given, that the ESM is inter-governmental and seen as free from political interference, some analysts believe it could be the answer to Germany’s call to see European fiscal rules applied effectively.
“They worry that the commission is likely to be unwilling to push member states hard enough when they break the rules. The EMF would be less afraid of being unpopular and so more willing to impose discipline,” Jones said.
