MESEBERG, Germany-
Angela Merkel
he bowed to the French president
Emmanuel Macron
demands for a eurozone budget on Tuesday as part of a package of measures to reform the European Union, which the two will now put their neighbors in an attempt to overcome the deepening divisions of the continent.
While the size of the budget has yet to be determined, the German leader's concession means that Berlin and Paris – the two largest economies in the eurozone – will face the other member states of the bloc with a joint line when they meet in Brussels to discuss the changes by the end of next week.
"We have found a good solution," Merkel said, adding that she was convinced that the legislators of her coalition government would support the idea of a budget designed to stimulate investment and convergence among the 19 EU member states that They share the euro as currency.
The agreement came about when the EU unit faces challenges on several fronts. The open hostility of President Donald Trump to the EU and punitive trade measures have raised the urgency of a Franco-German agreement, as both countries seek to find common ground in the reforms before attempting to present a united front to the US. UU In a growing series of disputes.
On the continent, recent elections have emboldened the anti-European parties that oppose Mr. Macron's call for greater integration. Tensions broke out between European capitals last week when Italy's new anti-establishment government refused to take a ship of immigrants stranded in the Mediterranean.
Ms. Merkel's green light for Mr. Macron came after several hours of talks at a government guest house north of Berlin, during which the leaders tried to bridge the remaining differences in economic and foreign policies. Advisors close to the leaders had paved the way for several days and nights of preparatory meetings in recent weeks.
"This summit comes at a moment of truth for Europe, in each state and for the continent," said Mr. Macron.
In a victory for Merkel, whose liberal position on refugees is under increasing pressure at home, Macron pledged to support her call for an EU-level plan to manage migration, and said France would make its part to help the German chancellor to recover the refugees who first registered in France, but later sought asylum in Germany.
Horst Seehofer,
Interior Minister and Merkel coalition partner said on Monday that he would unilaterally instruct border police to start returning more immigrants to the borders of Germany, a move Merkel opposes if he had not reached similar agreements with neighboring countries within two weeks.
Mr. Macron endorsed Merkel's initiative for a European resolution to the challenge of migration.
"Unilateral and uncoordinated action will divide Europe," the two leaders said in a joint statement.
Mr. Macron and Merkel set Tuesday's meeting as a deadline to seal an agreement on the lawsuits. Macron established almost nine months changes in the EU and a set of resources among the 19 countries of the euro zone.
Prolonged political instability since The German elections in September have delayed and complicated negotiations between Berlin and Paris, leaving the two sides with only a few days to unite other European nations behind their plans before a summit of leaders of the EU next week.
But Ms. Merkel's domestic difficulties, especially the turmoil of last week with her own interior minister, could have played into the hands of the French president by increasing Ms. Merkel's interest in a positive outcome.
Ms. Merkel and Mr. Macron reached a compromise at the summit to close long-standing divisions over the revisions proposed by the French leader for more substantial support for the banking system and an embryonic joint budget for the monetary bloc.
In their statement, the leaders said they would establish a eurozone budget from 2021 to promote "competitiveness, convergence and stabilization". They also said that they would transform the Euro 500 billion rescue fund – the European Stability Mechanism known as ESM – into a permanent fund that could offer term loans to governments with financial problems, as well as short-term lines of credit.
Mr. Macron had argued that the eurozone could not survive without a greater exchange of resources and burdens, while the government of Ms Merkel had been skeptical of pledging taxpayers' money to shore up their neighbors.
The budget resources would come annually from the contributions of the member states, allocating fiscal resources -possibly including a European tax on financial transactions- and other European resources. But the details were deliberately vague, Macron said, to allow the 19 members of the eurozone to define the budget together.
"Today, France and Germany clearly say that we want a budget from the eurozone, whereas before there was nothing," he said. Macron said.
Even when France and Germany agreed to the principle of a budget, they may have difficulty convincing the other 17 countries of the euro area.
"No one has been able to tell me what problem can be solved with this," Dutch Finance Minister Wopke Hoekstra said in an interview on Tuesday with the German newspaper Frankfurter Allgemeine Zeitung.
Write to William Horobin at Wil[email protected] and Andrea Thomas at [email protected]
.
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