The leaders of Germany and France meet on Thursday to try to work out a common position on reforming the eurozone, a sensitive issue that is testing the new government in Berlin just a month after it took office.
German Chancellor Angela Merkel, who hosts French President Emmanuel Macron for the working meeting, is under pressure from her conservative bloc in parliament not to agree to any reforms that result in German taxpayers funding what they see as profligate eurozone peers.
Macron’s vision includes turning Europe’s existing bailout fund into a European Monetary Fund (EMF), to act as a buffer in any future financial crisis in the bloc.
He has also suggested the eurozone have its own finance minister and, at one point, floated the idea of a budget for the currency bloc worth hundreds of billions of euros.
“We have lots of institutions, why another one?” asked Ralph Brinkhaus, deputy leader of Merkel’s conservative bloc in parliament and a budget expert.
“And on the eurozone budget, why should the eurozone, in addition to the European Union, have an extra budget?” he told broadcaster ARD. “Why something else again?”
At a meeting with conservative lawmakers earlier in the week, Merkel trod a careful line between Macron’s drive for bold reform and their push to retain scrutiny over any European Monetary Fund developed out of the existing eurozone bailout fund.
Officials in Berlin and Paris both express confidence that they will find a common stance before an EU summit on June 28-29.
“Let me reassure you that the silent, secret, demanding work under way will allow us to reach a true Franco-German roadmap by the time of the next European summit in June,” French Finance Minister Bruno Le Maire told lawmakers in Paris on Wednesday.
In Berlin, a government spokeswoman said Germany and France “have the firm desire to find a joint way forward”, echoing Merkel’s own cooperative tone at a news conference on Tuesday.
France and Germany, which account for around 50 percent of euro zoneoutput, are essential to the reform drive. But while they often put on a strong show of political unity and shared intent, the devil is frequently in the detail.
Asked if Macron would come away from Thursday’s meeting with no new financial commitments, Brinkhaus said, “He has already got a lot financially and Europe has got a lot financially, and of course we will continue to invest in good projects.”