Merkel warns of gaps as Germany takes EU helm

Merkel will try to bridge the gap between member states at the summit of EU leaders on 17-18 July in Brussels on the planned €750bn rescue package and the proposed €1.1 trillion 2021-27 budget.

Merkel earlier said she hoped EU leaders could agree already on the July summit.

She warned that if some countries emerged from the turmoil much weaker than others, "that would call into question the cohesion and convergence of the EU, and the functioning of the single market".

On Wednesday, Merkel also warned that the EU should be prepared, should talks with the UK over its future relationship with the the bloc fail.

But the budget and Brexit will only be two items on a busy agenda for the German EU presidency.

Dealing with the effects of the pandemic will be key - whether on the Schengen passport-free zone, or the supply chains for of pharmaceuticals and medical gear.

Managing the EU commission's upcoming new asylum reform package will also be a top priority.

Here, Berlin is promising to push for reform that ensures "the just distribution of those seeking protection according to a fair responsibility-sharing regime and effectively tackles secondary migration.

The presidency also aims to expand cooperation with China, work on setting into law the EU's climate targets, move the Conference on the Future of Europe forward, tries again on the financial transaction tax, work on the digital tax, and fair minimum wages.

The presidency of the council is often disregarded since the establishment of a permanent head of the European Council (the meeting of EU leaders) but it remains a crucial EU institution.

The presidency pushes files through the council, negotiates with the parliament on legislation, and has the power to drive certain issues harder.

'No existentialism, get on with day job'

It will be the last time a Merkel-led government heads the EU presidency - her first council presidency as chancellor was back in 2007.

During the euro crisis, Merkel was accused of being short-sighted, lacking solidarity and a European vision.

Berlin is often scorned for not taking more assertive leadership positions in the EU, despite being its largest economy.

But as the post-corona economic crisis looms, Merkel - in a major political shift - gave her backing to the plan to allow the EU commission to borrow money on a large scale and distribute it in non-repayable grants to member states badly hit by the corona crisis.

She also did not shy away from promoting one of her political proteges, former German defence minister Ursula von der Leyen to the top of the commission last year, as other more likely candidates tumbled.

The next six months will give her another chance to leave her mark on the European project, which she described as "fragile", as she prepares to leave the chancellery in 2021.

Growing up in the former East Germany, Merkel upheld Europe's unity as the bloc's guiding asset and driving principle - and that had been put to the test several times in the last decade.

Merkel had to manage deep and unprecedented European crises - the debt crisis, migration crisis, Brexit, Russian annexation of parts of Ukraine to name a few - and now the coronavirus, an increasing protectionist global trade, a rising China, an unpredictable US and climate change.

But she refuses to be drawn into speculation about the EU's future.

"Rather than ask the existential question too often, we should get on with the day job," she told in a recent interview with European newspapers when asked if the EU's survival is at stake.

On Thursday, von der Leyen and Merkel will hold a press conference and the German chancellor will next week address the EU parliament.