Saturday

1st Oct 2022

Merkel in Paris for eurozone reform talks

  • Macron (l) and Merkel head the largest eurozone economies (Photo: Consilium)

Germany's chancellor Angela Merkel is heading to Paris on Friday (16 March) to meet French president Emmanuel Macron to discuss eurozone reforms.

Merkel, weakened by a shaky German government coalition deal, is seeking to renew and strengthen relations with France but is broadly wary of Macron's more ambitious eurozone reform proposals.

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Macron is pressing for a common eurozone finance minister and an investment budget to deepen fiscal integration and to shore up defences against financial crises.

But earlier this month, some eight northern EU states had also thrown their opposition against such plans, possibly complicating French negotiation with Germany.

Germany wants to keep a national grip on such issues but has warmed up to the idea of turning the European stability mechanism bailout fund into a European monetary fund. It does not want a eurozone finance minister although Merkel earlier this week said they support a banking union under certain conditions.

Merkel finally kicked off her fourth term as chancellor on Wednesday (14 March) and told broadcaster ZDF on the same day that she is very pleased of a pro-active France "on the European stage". She also praised Macron for making proposals.

She is facing a tough balancing act given the coalition between centre-left Social Democrats (SPD) and the conservative Christian Democrats (CDU). Each has their own vision.

Unlike the SPD half of the coalition, the conservative bloc is less keen on any ideas that seek to pool risk and debts with other countries. But it will be SPD finance minister Olaf Scholz who will be in Paris.

The Paris talks also feeds into larger discussions ahead of an EU summit next week , which aims to set out a strategic and political vision of Europe for the next few years.

The agenda could set the stage for greater convergence, a term that broadly describes the process behind better European economic integration. How far and to what extent may become more apparent following Friday's Merkel and Macron meeting.

However, the EU's two leaders of the largest eurozone economies are likely to present a common front on other issues given the recent Italian election results that could see a far-right nationalist become prime minister.

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