France and Germany are "determined" to reach a compromise on President Emmanuel Macron's proposals for a shake-up of the eurozone, a French government source told AFP after marathon talks between the two countries.
Paris and Berlin are racing to bridge the gap between Macron's ambitious EU reform agenda and Chancellor Angela Merkel's more prudent approach by a crunch eurozone summit on June 29, AFP reported.
French Finance Minister Bruno Le Maire spent nearly 14 hours holed up with his German counterpart Olaf Scholz at a Paris hotel on Saturday, the source told AFP.
While the talks, which lasted into the early hours of Sunday, did not yield an agreement the ministers discussed "all the unresolved issues" and made "substantial progress", the source said.
"We still have work to do before agreeing on a roadmap," the source continued, adding "there is agreement on nothing until there is agreement on everything" and that Le Maire and Scholz planned further talks in the coming week.
Macron is on a drive to reconcile Europeans with the European Union after years of austerity and mass migrant flows have fuelled the rise of populist and nationalist parties.
He has seized on Britain's vote to leave the bloc as a chance for closer integration, with the aim of adopting sweeping changes before European elections in May 2019.
But Germany and other northern European states have baulked at his calls to give the eurozone its own big "rainy day" fund, fearing the more fiscally prudent north will have to pick up the tab for overspending by the more profligate south.
In an interview last weekend, days after a eurosceptic government took office in Italy, German Chancellor Angela Merkel made some concessions. She said the eurozone's top economy would support Macron's call for an investment fund to help poorer European countries catch up in the areas of science, technology and innovation.
Historic Opportunity
But the size of the fund remains a major bone of contention, with Merkel saying it should be "at the lower end of the double-digit billions of euros range" while Macron has called for a budget amounting to "the equivalent of several points of the GDP of the eurozone".
Merkel also detailed her proposals to upgrade the eurozone's bailout fund into a European Monetary Fund—under strict lending conditions and on condition that member states retain oversight over the body.
Macron's office welcomed the concessions but during a visit to Berlin on Friday Le Maire called on Germany "to go further". "It is a courageous response that goes in the right direction," Le Maire told AFP.
"Is it sufficient? No. We think you have to go further and that this is a unique, historic opportunity to make very significant progress toward better integration of the eurozone," he said.
EU Gets Closer
Events at the Group of Seven summit have brought the European Union closer together, Germany’s economy minister said on Monday, Reuters reported.
Having left the meeting in Canada early, US President Donald Trump said he was backing out of the group’s joint declaration, sinking what appeared to be a fragile consensus on the trade dispute between Washington and its top allies.
“The commotion at the G7 summit in Canada has brought the European Union closer together. It is important we show unity at all levels,” Peter Altmaier said on arrival at a meeting of EU ministers in Luxembourg.
Germany sees no immediate solution to the trade dispute with the United States, and Europe must act decisively in the wake of Donald Trump’s decision to impose tariffs on metals, he said.
Trump, who has shocked allies by hitting them with tariffs on steel and aluminum, also said he might double down by hitting the auto industry, a particularly sensitive issue for Germany whose car industry relies heavily on the US market.
“It is important that the Europeans act decisively,” Altmaier told Deutschlandfunk public radio. “At the moment it seems that no solution is in sight, at least not in the short term.”
Merkel on Sunday said Trump’s backing out of the G7 final communique via Twitter was “sobering and a bit depressing”. She promised an EU response to the steel and aluminum tariffs in line with World Trade Organization rules.
Merkel will on Monday hold talks with International Monetary Fund Managing Director Christine Lagarde, WTO Director-General Roberto Azevedo, OECD Secretary-General Angel Gurria and World Bank President Jim Yong Kim.
