- Macron and Merkel have vowed to deepen Franco-German cooperation after a joint Cabinet session in Paris.
- Merkel has expressed support in principle for some of Macron’s key proposals on EU and Eurozone reform, while Macron has backtracked on others that Germany is opposed to.
- France and Germany have agreed to develop jointly a new generation of European fighter jets, and to follow up on EU defense cooperation, which is yet to be materialized.
- Major Franco-German reform projects would have to wait for at least three-months, until the parliamentary elections in Germany in the fall when Merkel is expected to win a fourth government term.
Germany’s Chancellor Angela Merkel, who hopes to win a fourth government term in the fall, and France’s recently elected President Emmanuel Macron have vowed to keep up the close Franco-German partnership while focusing on reforming the European Union.
When Macron and Merkel met in May, the day after Macron’s inauguration as French president, they pledged to create a new “road map” for medium-term cooperation and for reviving the EU.
On the campaign trail, Macron declared himself a fan of Merkel’s economic policy, but also told Germany that it should “rebalance” its trade, arguing that amassing a huge trade surplus is good neither for the German economy, nor for the Eurozone.
EU Finance Minister and Eurozone Budget
Merkel and Macron vowed closer cooperation at a joint press conference with President Emmanuel Macron on Thursday, with the German leader supporting the French President’s proposal to create an EU Finance Minister position and a budget of the Eurozone, France24 reported.
Before that the Cabinets of France and Germany held a joint sitting in the French capital during the annual Franco-German summit.
“I believe that we have shown shortly after the new government here was installed that we are ready to activate Franco-German relations with a new impetus,” Merkel said on Thursday, as cited by Deutsche Welle.
Speaking at the Elysee Palace in Paris, Merkel made it clear she wanted a new focus to Franco-German relations, promising a closer alliance between the two largest EU economies with the aim of reforming the bloc.
”I believe that we have shown shortly after the new government here was installed that we are ready to boost Franco-German relations with a new impetus,” Merkel said.
She declared she was open to the creation of an EU Finance Minister position and a budget for the Eurozone, which includes 19 of the EU’s 28 member states as proposed by Macron, two novelties which would require amending the current treaties of the European Union.
“I have nothing against a Eurozone budget [and] we can talk about creating a European Finance Minister,” Merkel said.
“We agree that the Eurozone must be stabilised and further developed. It is in our greatest interest that all eurozone countries are strong,” she added.
“With the chancellor (Merkel), I want to build ambitious and concrete projects, with a clear purpose,” French President Macron told regional daily Ouest-France on Thursday.
“I want the eurozone to have more coherence and convergence,” he said.
“France must reform its economy to give it more vigor,” Macron noted.
“Germany … has a strong economy, but it has demographic weaknesses, economic and trade imbalances with its neighbours and shared responsibilities to give the euro area the future it deserves,” he said ahead of the meeting.
“Germany must concern itself with the reinvigoration of public and private investment in Europe,” Macron had said ahead of the meeting.
Responding to fears that German taxpayers may have to shoulder the burden of shared debts, Macron said he was not in favor of turning national debts into a single pool of eurozone debt.
EU Defense Cooperation
It is reminded that late May, commenting on Brexit, i.e. the UK’s exit from the EU, and a perceived US withdrawal under Trump, that Europe must fight for its destiny.
On Thursday, Merkel stated that even though last week’s G-20 summit that it hosted in Hamburg saw some common ground with the United States, some major differences with Washington remained.
“We also had to name clear differences, for instance, regrettably, the difference on whether we need the Paris climate accord or not,” the German Chancellor said.
France and Germany also agreed to jointly develop a “new generation” of European fighter jets that would replace their current fleets, which Macron called a “revolution” in their defense relations.
Macron and Merkel said they both supported the European defense fund, calling it an “important pillar of the integration of the European defense sector”.
The fund, which was created by the EU last month with an annual budget of EUR 5.5 billion (USD 6.1 billion), lays the basis for permanent EU military cooperation.
“The aim of this joint fighter jet project is to do research and development together… to use it together… and to coordinate on exports,” Macron said as he described it as “a profound revolution.”
Europe’s two fighter jets are the Rafale made by Dassault and the Eurofighter, a joint project between Germany, Britain, Italy and Spain.
Some of the projects would be opened up to other European countries once they are “sufficiently developed,” they said.
Speaking later in the day in a defense policy speech, Macron said French military spending would be increased from next year in order to reach a target of two percent of economic output by 2025.
“It’s a considerable effort, considering the current context of budgetary constraints,” Macron said.
France’s defense spending would reach EUR 34.2 billion (USD 38.98 billion) in 2018, including EUR 650 million for foreign missions, Macron said.
The French leader was also set to press Merkel for a financial and military contribution to a joint anti-jihadist regional force called the G5 Sahel made up of forces from Burkina Faso, Chad, Mali, Mauritania and Niger.
However, it is noted that it would be difficult for France and Germany to go ahead with major cooperation projects before Germany’s parliamentary elections in September.
Merkel, who has been in power in Germany since 2005, is nearing the end of her third four-year government term. Based on public opinion polls and recent wins in German provincial elections, she is expected to win a fourth term in the fall.
The German Chancellor reiterated on Thursday that major reforms would have to wait until after the September vote, which her centre-right Christian Democratic Union (CDU) is expected to win.
“We need a mandate from parliament, which we will seek after the elections,” she said.