In Paris, the pair will receive recommendations from a group of French and German industrialists on fostering European industrial champions able to compete for global trade with US and Asian rivals.
The bilateral discussion will also dwell on reforms intended to strengthen the eurozone, which has only recently started to emerge from a three-year sovereign debt crisis that brought the single currency bloc close to implosion.
Speaking in January, the two leaders promised to come up with joint proposals on greater eurozone cooperation, boosting industrial competitiveness and job creation ahead of an EU summit on 27-28 June.
Few details have yet to emerge on the plans, and officials on both sides have privately played down expectations of any major European policy initiative ahead of a September election in Germany in which Merkel is seeking to win a new term.
Hollande on the offensive
In a closely watched news conference on 16 May, Hollande called for an economic government to steer the eurozone, with its own budget, the right to borrow, a harmonised tax system and a full-time president.
Hollande said such an economic government would debate the main political and economic decisions to be taken by member states, harmonise national fiscal and welfare policies, and launch a battle against tax fraud.
He acknowledged he could face resistance from Germany, Europe's dominant power, which opposes France’s push to mutualise debt among member states. Berlin is also reluctant to give the eurozone its own secretariat for fear of deepening division in the EU, between the 17 members of the single currency and the 10 others.
Merkel sees longer-term political integration
For her part, Merkel has openly stated her belief that the eurozone crisis could not be overcome without a treaty change to transfer national competences – such as budgets – to European institutions.
>> Read: Merkel calls for 'political union' to save the euro
She is backed by the European Commission President José Manuel Barroso, who has pushed for “further political and institutional integration” and a consolidation of “a truly political union” through a change of the EU treaty.
In November, the Commission President laid down his vision for the future of the eurozone, saying it was important to complement short-term fire-fighting measures for troubled countries with a longer-term vision for strengthening economic and monetary integration.
>> Read: Barroso lays out 'ambitious vision' for the eurozone
One largely-accepted idea is to introduce a special eurozone budget that would provide the financial ammunition to help achieve economic reforms in countries under stress. A specific "Treasury within the Commission" would deal with monitoring and managing that budget.
But Paris and Berlin have clashed publicly over the content of reforms, with Merkel pushing for longer term “political union” and Hollande placing the emphasis on short-term measures to restart the economy and tackle unemployment.
The French President also argued for more “solidarity”, saying the eurozone needed some form of debt pooling instrument to bring down the borrowing costs of troubled economies, a move resisted in Berlin, which says such a move can only take place at the end of a political integration process, with new powers transferred to Brussels.
