In an initial coalition agreement with Angela Merkel’s CDU, Mr Schulz’s SPD has backed an “investment budget” for the euro, as well as turning the ESM bailout mechanism into a European Monetary Fund under parliamentary control.
Speaking to broadcaster ZDF, Mr Schulz declared: “The paper is a turnaround for European politics. There will be a European finance minister.”
Leading CDU figures including Angela Merkel had initially expressed doubts about whether such a figure would have too much power, but she appears to have backed down in a significant concession to europhile Mr Schulz.
The announcement is a huge success for French president Emmanuel Macron, who proposed the sweeping EU reforms, including the creation of a Euro finance minister.
And the agreement between Germany’s two largest parties sees them commit to developing “common positions with France on all important questions of European and international politics”.
Mr Macron has expressed some scepticism about the CDU-SPD propositions for EU reform, as he personally does not back the creation of a European Monetary Fund, believing it is enough to make some minor changes to the ESM.
However the plans bring Germany much closer to his views on the Eurozone – meaning Angela Merkel is highly likely to throw her weight behind his vision, which also includes an EU army and shared defence budget in a bold vision for Europe.
After the 28-page document was unveiled on Friday morning, Mr Schulz said: “Together, we are determined to use Germany’s strength, both economically and politically, to make Europe a grand project again. This is our common goal.”
EU Commission president Jean-Claude Juncker is delighted with the pro-European deal. He said: “In terms of the substance I’m very happy with what the CDU/CSU and the SPD have agreed. It is a significant, positive, forward-looking contribution to European policy debate in Europe.”
The creation of a European finance minister could be the first step in former European parliament president Mr Schulz’s dream for a federal Europe.
At the SPD conference in December 2017, he laid out his desire to create a United States of Europe within eight years, telling party delegates: “I want there to be a constitutional treaty to create a federal Europe.”
In the same speech, he vowed the SPD would take an active role in shaping European policy, refusing to give a say to more conservative figures such as former finance minister Wolfgang Schäuble.
The SPD membership will vote on the deal at a party congress set for January 21.