Angela Merkel and Emmanuel Macron ‘open new eurozone chapter’

German chancellor backs French president’s
call for greater economic integration with landmark budget

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The French president has long advocated wide-ranging reforms to
strengthen the eurozone and insulate the single currency union from
future crises.

The centrist president was elected on a platform of
strengthening the eurozone and promoting EU integration, and has
staked his political future on being able to draw EU countries
together politically and economically.

Last year, Macron laid out an ambitious plan for an integrated Europe,
calling for a single defence budget, an EU defence force and a
shared budget for eurozone countries.

While Europe’s economy has picked up and there is no immediate
sign of financial stress, Reuters says “many analysts maintain that
reforms are needed to protect the single currency”.

However, Merkel, who is wary of growing anti-EU sentiment at
home and under pressure to curb migrant arrivals, has struck a more
cautious approach to further EU integration, in the past opposing
the idea of a significant eurozone budget because it would entail
more risk sharing and fiscal transfers, says the Financial Times.

But while the proposals appear to fall short of Macron’s
ambitious vision set out last year, in what appears a major victory
the French president, the beleaguered Merkel said the budget
agreement represented a “new chapter” for the eurozone.

“We are working to make sure that the eurozone budget will be
used to strengthen investment, also with the aim of strengthening
convergence within the euro zone,” she added. “Because we know that
a economic and monetary union can only remain intact if economic
policies converge.”

Details of the budget, including its amount and whether it would
be financed by national sources or a bloc-wide tax, will now be
hammered out by ministers before the end of the year.