Germany’s Schaeuble Urges Post-Brexit Push to Curb Brussels

(Bloomberg) -- Finance Minister Wolfgang Schaeuble signaled that Germany wants national governments to set the pace for future cooperation within the European Union, saying they should sidestep the European Commission in Brussels if needed.

Schaeuble's comments in Sunday media interviews outline the emerging response by Chancellor Angela Merkel's government to last month's U.K. referendum to leave the EU. It signals a looming clash with advocates of EU integration such as European Commission President Jean-Claude Juncker and those governments that view German-led budget rigor in the euro area as holding back growth and jobs.

Defense cooperation, possibly including a joint project fund led by Germany and France, and a European push to promote digital companies to counter “the American monopolies” are ways in which the EU could show its usefulness amid growing skepticism across Europe, Schaeuble said in an interview on ARD television. Progress shouldn't be determined by “the slowest” of the 27 EU nations besides the U.K., he said.

“Now is the time for pragmatism,” Schaeuble told the Welt am Sonntag newspaper. “If not all 27 want to pull together from the beginning, then we'll just start with a few. If the Commission isn't coming along, then we'll take matters into our own hands and solve problems between governments.”

Faced with pressure to back stimulus spending from southern European countries and Merkel's Social Democratic coalition partner, Schaeuble said all euro-area countries signed up to the currency union's debt and deficit rules.

“It's not about saving money,” he said on ARD. “What's remarkable is that those who have kept to the rules have decent economies. What we really don't have is a shortage of debt.”

To rebound from the Brexit vote, the EU should focus on competitiveness, economic growth, fighting terrorism, securing the bloc's outer borders and lowering youth unemployment, Merkel said in her weekly podcast on Saturday.

“Youth unemployment is too high, and that is closely linked to the issue of economic strength and competitiveness” in the affected countries, she said.

In his newspaper interview, Schaeuble expressed frustration that EU officials in Brussels took too long to respond to the refugee crisis last year. Many people's dissatisfaction with the EU is because rules weren't respected, including by the European Commission in its response to the sovereign-debt crisis, he was quoted as saying.

He declined to criticize Juncker, saying he had backed him to head the European Commission.

“A debate about personalities won't get us ahead,” Schaeuble told Welt am Sonntag. “The Brexit decision has to be seen as a wakeup call for Europe. That's what the issue is right now.”

To contact the reporter on this story: Nicholas Comfort in Frankfurt at ncomfort1@bloomberg.net. To contact the editors responsible for this story: Alan Crawford at acrawford6@bloomberg.net, Simone Meier at smeier@bloomberg.net, Tony Czuczka