Following the Brexit referendum, Bundesbank President Jens Weidmann has called for a discussion on the shape of Europe's future. In order for democracy to work effectively, he believes that citizens need to be interested and active, and that politicians need to listen. "However, many people feel that they have nothing to gain from Europe but that they are instead bearing others' burdens," he said in an interview with the German weekly magazine Focus, adding that many perceive Europe as being "too big, bossy and bureaucratic".

Specific advantages of European integration

In Mr Weidmann's view, European integration is a historical project which should benefit all citizens, and that these citizens have to be shown clearly the many specific advantages of European integration, such as lower roaming fees or freedom to travel. He added that the potential here is still far from being exhausted, pointing out that benefits could also be gained from a single market for digital services or shared border protection.

At the same time, the Bundesbank President does not believe that other countries will now exit the EU following the British referendum. "I cannot imagine that the negative consequences of Brexit for the United Kingdom will make such a step palatable to other countries," he said. Looking ahead in terms of the future relationship between the United Kingdom and the European Union, Mr Weidmann advocated for maintaining as many economic links as possible. "The UK will remain a key partner in the future."

Fiscal rules not to be softened

Stating how important it is that the euro-area countries abide by shared agreements and joint promises, Mr Weidmann cautioned against using the Brexit vote as a reason to further soften the fiscal rules. He feels that the European Commission is unfortunately also partly responsible for insufficient compliance with these rules and that the trade-off between making political compromises and guarding the treaties has not been good for it. In this context, the Bundesbank President reiterated the idea of creating an independent institution to monitor adherence to the agreed rules. "If there were an independent institution to oversee compliance with the rules, we would then see clearly where analysis ends and the political process begins." Mr Weidmann also pointed out that the rules enshrined in the Maastricht Treaty are still legally binding. "They rule out a transfer union, but need strengthening." In his opinion, a fundamental decision also needs to be made on how closely Europe should ultimately integrate, and all this, he added, seemed more pressing than reflexive calls for a further-reaching communitisation of liability.

Mr Weidmann also stressed, however, that monetary policy must not be used to force countries with excessive deficits onto the "fiscal policy straight and narrow" or to reward them for their reform efforts. "If we were to try in this manner to force other countries to take the political actions we want them to take, we would be violating our mandate to ensure price stability and abusing our independence."