In a show of unity, French President Emmanuel Macron and German Chancellor Angela Merkel met on Monday (29 June) and reaffirmed their commitment to the EU Recovery Fund, voicing hope that EU leaders would overcome their current differences. EURACTIV Germany reports.
Macron and Merkel held their first face-to-face meeting since the outbreak of the pandemic at Meseberg, north of Berlin. The two said the Franco-German motor is stronger than ever but warned that “there is still a long way to go” before an agreement is reached among EU027.
The focus was on the EU recovery fund that France and Germany jointly presented on 18 May. For Germany, that day marked a radical ‘U-turn’ as Merkel had until then stood for austerity and fiscal prudence. Her support for a grant-based reconstruction plan means that the more frugal member states had lost an important ally.
The fund and the EU budget will be the main topic at the next EU summit on 17-18 July, where heads of state and government will meet face to face in Brussels for the first time since the pandemic began.
And just three weeks ahead of this summit, Merkel and Macron are signalling that their unity did not end with the joint initiative.
Je suis heureux de retrouver Angela Merkel pour avancer sur le plan de relance européen qui permettra de surmonter la crise économique et sociale. Nous allons tout faire pour convaincre nos partenaires. L’Europe en a besoin. pic.twitter.com/LzNiR64oBs
— Emmanuel Macron (@EmmanuelMacron) June 29, 2020
A new German will to reform
“When Germany and France are united, Europe is not united, but when France and Germany are not united, Europe is not particularly well off,” the German chancellor told a joint press conference, underlining the significance of Franco-German cooperation.
Merkel and Macron also demonstrated unity with regard to the German EU Council presidency, which starts on 1 July. According to Merkel, the two sides aim to “play a joint role” in major issues such as digitisation and climate protection in the coming weeks. They would also “contribute to providing a positive impetus,” she added.
The chancellor also described the Conference on the Future of Europe as a project that links Germany and France in that the starting and finishing points could fall within the respective national presidencies. In between, she said, there had to be clarity about what ” we want to change in Europe”.
While Merkel had often been accused of being too inflexible and hesitant in responding to the French president’s reform proposals in recent years, it now looks as if the chancellor is trying to make her legacy as an EU designer in her last term in office.
In recent months, the chancellor has repeatedly stressed that the EU urgently needs reforms and that treaty changes should no longer be “taboo”.
Agreement already in July
Macron emphasised the need to make rapid progress on the EU financial framework and recovery plan. “An agreement must be reached in July, that is our top priority,” he said, as “waiting would not make things easier.”
Macron also stressed that grants rather than loans should be at “the heart” of the European recovery plan because loans would only contribute to the economic difficulties that already exist. For this reason, the plan proposed by France and Germany represents a good balance between jointly borrowed debt and grants, he said.
The French president thus increased the pressure on the so-called “Frugal Four” – Austria, Denmark, the Netherlands and Sweden. “The Frugals are the net beneficiaries of the single market. It benefits them much more than others,” he said, stressing that it was in their interest to adopt this recovery plan.
Litmus test for Berlin
Failure to adopt the recovery plan would “exacerbate all problems” and fuel populism, the chancellor had warned in an interview with European newspapers on Saturday (27 June).
And if France and Germany succeed in overcoming the reluctance of the “Frugal Four” to accept the economic recovery plan in its current form, the German EU presidency will be partially successful.
Germany already has France’s backing during the presidency. “We will stand by you during the German Presidency,” said Macron.
France itself will hold the EU Council Presidency in the first half of 2022, meaning it will coincide with the next presidential and parliamentary elections.
A border carbon tax
The two also showed a common front on the proposal for an EU carbon border tax, an idea that other states do not necessarily support.
“It is a common position [with France] that we need such a tax. It must be compatible with the World Trade Organisation,” Merkel said. It is not insignificant, she added, because the EU must protect itself against countries that want to import products with a high carbon footprint.
The tax was mentioned by the European Commission as a possible means of repaying the joint debt, for which the two countries must also overcome the at times strong resistance from other member states.
[Edited by Zoran Radosavljevic]