Germans propose linking the British renegotiation to Eurozone reform

Wolfgang Schäuble’s decision to link the British renegotiation to changes to the governance of the Eurozone is highly significant. In an interview the German Finance Minister told the Wall Street Journal that he has discussed George Osborne ‘coming to Berlin so that we can think together about how we can combine the British position with the urgent need for a strengthened governance of the eurozone’. Schäuble went on to say that ‘the structure of this currency union will stay fragile as long as its governance isn’t substantially reinforced. Maybe there is a chance to combine both goals’.

Schäuble’s comments are the most encouragement that the government has had on the renegotiation front. For if British renegotiation and reform of the Eurozone are linked, far more is on the table than if the British renegotiation was taking place in isolation. It means that there is a real possibility of the creation of an inner Eurzone core of the EU and then an outer core, which is explicitly not on the path to ‘ever closer union’.