Merkel, Macron to deepen Franco-German cooperation, strengthen EU

French President Emmanuel Macron and German Chancellor Angela Merkel during their meeting at Elysee palace in Paris on 19 January 2018. [EPA-EFE/Christophe Petit Tesson]

Chancellor Angela Merkel and President Emmanuel Macron said on Sunday (21 January) they wanted to deepen Franco-German cooperation and give the European Union a fresh push towards closer integration.

Angela Merkel’s arrival in Paris just 48 hours before a crucial vote on Sunday (21 January) on her own governing coalition shows just how close the two countries are. But progress on European issues is impossible without a new German government, which will not come before Easter.

The date chosen for Merkel’s meeting with Emmanuel Macron in the French capital was strange: three days before the 55th anniversary of the Elysée Treaty and two days before a vote on whether to hold talks on a new grand coalition in Berlin. Merkel may be politically paralysed but the fact that the meeting took place at all shows that French-German relations are as crucial as ever.

“We are doing that in order to bring the people in our countries even closer together. And we do it to give the whole of Europe a new boost, to make it even stronger,” Merkel said in a joint video podcast as the countries prepare to seal a new bilateral compact.

“We must be clear on the objective we are pursuing, rather than the tools we do not yet have […]. If we share a vision of our objectives we will manage to reach an agreement,” Macron said at a press conference on Friday evening, repeating that he hoped to see “more economic integration” but that it was “too early to know if there are differences in the scale of our shared ambition”.

The Chancellor responded on the subject of agreement but remained evasive.

“I understood the Sorbonne speech in the following way: a Europe that is self-confident, that brings confidence to its citizens. We do not differ on these objectives,” Said Merkel, who added that the coalition document currently being discussed between her party and former European Parliament President Martin Schulz left “room for discussions with France on adequate solutions”.

No coalition agreement before Easter

At a special party congress in the western city of Bonn on Sunday, 372 out of 642 delegates (56%) backed SPD chief Martin Schulz’s appeal to approve a preliminary coalition deal painstakingly hammered out with Merkel’s CDU/CSU bloc.

A recount was held after an initial show of hands was too close to call for the SPD official in charge of the count and the result was slightly narrower than most analysts expected.

Four months after the elections and after a failed first attempt at forming a government between Merkel’s conservative Christian Democrats, the liberal Free Democrats and the Greens, this vote was crucial to the country’s political future.

Assuming the delegates from the CDU and Schulz’s Social Democrats (SPD) now manage to strike a coalition deal, this will have to be voted on by the 400,000 SPD members, meaning the government would not take office until Easter.

Brussels to unveil eurozone reform vision despite doubts

The European Commission will unveil a raft of ideas to reform the eurozone today (6 December), despite the resistance of powerful Germany, which remains without a government.

Europe, Schulz’s unconvincing trump card

“The exploratory discussions show real ambition on the subject of Europe,” Macron said on Friday.

But Europe’s heads of state will meet at the end of February to discuss EU reform at the European Council in Brussels, before presenting their proposals in June. For Germany, the clock is ticking, and this was the trump card Schulz played to the SPD delegates on Sunday: Do not block Europe by blocking the coalition deal.

“But Germany’s preoccupation at the moment is the management of the borders and migration. These subjects are making good progress between France and Germany, it is the other countries that are blocking them. On economic questions, Germany does not see the establishment of a eurozone budget or a eurozone finance minister as a priority,” one diplomat said.

Macron shifts focus away from eurozone reform to court Merkel

French President Emmanuel Macron, concerned that a divisive discussion over eurozone reform might undermine his broader European agenda, has begun prioritizing other areas of EU cooperation, French officials say.

French Finance Minister Bruno Le Maire held talks with his German counterpart Peter Altmaier in Paris on Thursday.

“We have … an immediate priority, which is the completion of the banking union, the completion of the capital markets union and tax convergence with Germany,” Le Maire said.

“On these three issues, our goal is to reach a final joint position between March and June.”

Germany and France often put on a show of political unity when it comes to the eurozone – and Macron stressed once again on Friday that “our ambition cannot come to fruition alone… It needs to come together with Germany’s ambition.”

But the devil is in the detail.

Macron, elected in May on an avowedly pro-Europe platform, has set out grand plans, including suggesting at one point that the zone should have its own budget worth hundreds of billions of euros, an idea that does not sit well with Germany.

Talk of some sort of budget for the 19-country bloc remains, but its size – if it is ever agreed – is likely to be much smaller and it remains unclear how it would be established.

The idea of a single finance minister now appears to be a discussion for the future, and the suggestion that the euro zone’s 500-billion-euro ESM rescue fund be turned into a European Monetary Fund to stabilise member states facing economic shocks still needs to be fleshed out.

Merkel, however, remained upbeat.

“On a broad basis, there is absolutely no difference that I see,” she said, pointing out that the long-term ambition was a continent with strong finances, defences and foreign policy.

The discussion is still very much open on both sides of the Rhine, and promises to intensify once the new government is installed in Berlin.