Germany is open to reforms in the European Union

New German Finance Minister Christian Lindner on Monday underlined Berlin’s willingness to reform EU tax laws and find ways to strengthen the bloc’s financial sector by completing its banking union.

Speaking to the press ahead of a meeting with Paschal Donohoe, the head of the euro zone’s Eurogroup of Finance Ministers, Lindner said he wanted the EU to focus on recovering from the pandemic with the application of its 750,000 recovery fund. million euros, financed by debt, known as “Next Generation EU”.

“We are responsible for making this a success. I think it is more important than the debate on tax regulations, ”said Lindner, leader of the Free Democrats (FDP), a minor party in Chancellor Olaf Scholz’s tripartite coalition.

However, Lindner stressed that the new German government wanted to play a constructive role in the debate on how to further develop the EU’s fiscal rules, known as the Stability and Growth Pact.

Asked whether Germany continued to resist a cross-border bank deposit protection mechanism, Lindner said Berlin is willing to talk about creating a European deposit reinsurance system.

“We are open to moving forward. But we also have to advance in other aspects, for example the question of the nexus between banking and sovereign debt, “said Lindner, referring to the high concentration of bonds from the same state on the balance sheets of banks in the same country.

The completion of the banking union, which would entail the creation of a controversial common deposit guarantee fund, would drastically reduce the possibility of a major banking crisis occurring in the 19 countries that share the euro, thereby boosting confidence of the market in the euro and the demand for the currency.

However, the issue is very sensitive in several euro area countries and finance ministers, together with their colleagues from other non-euro EU countries, have been trying for years to reach an agreement on the guarantee fund. of deposits.

Italy, whose banks have significant holdings of national government debt, has opposed previous proposals to limit the exposure of euro area banks to single state debt.

The economy ministers of the 19 countries that make up the euro zone will meet on January 17.