"French President Emmanuel Macron will hold talks today, 19th April, in Berlin with German Chancellor Angela Merkel, in a further appeal to the EU to inject funds into reform. Macron is encountering growing German resistance, however.
"To dampen expectations of significant advancement, this brief meeting is now being described as a ‘building block’ in the construction of ‘common solutions’ prior to the EU summit in June. The site for today’s meeting is the historic Berlin Palace. Destroyed in the 1950s by the East German regime, it is currently being reconstructed, after a twenty-year debate about whether and how to rebuild. The setting could hardly be more symbolic.
"Macron had laid out his vision in a typically extensive speech to the European Parliament on Tuesday 17th April. He had sought to justify eurozone reforms as being ‘indispensable’ to the rising threats of nationalism and authoritarianism across EU states and beyond. The Napoleonic rhetoric did not manage to excite fiscally conservative members.
"Merkel’s own CDU/CSU alliance objected to proposals for a common eurozone budget and an expansion of the EU's bailout fund. A stubborn German view of European debt pooling, consolidated by the 2008 crash, is that the German taxpayer gets asked repeatedly to bail out profligate neighbours in the name of inclusivity.
"Merkel’s alliance has therefore insisted on tight conditions for any transformation of the EU bailout fund into a monetary fund that would become the lender of last resort. These include approval by each member state’s parliament. This is not going to happen. They have the same view of another of Macron’s shiny projects: a eurozone banking union. This raises up again the spectre of collapsing national banks.
"Given the weakened position of Merkel’s own alliance after a general election in Germany last year in which traditional parties lost millions of voters to the far-right, she does not have any domestic leeway to support these proposed investments. For many, the key financial priority involves how to plug the financial hole that the UK’s departure from the EU will create. Smaller northern countries in the EU also feel railroaded in the evocation of sweeping reforms. Ironically, they used to rely on the UK as a brake on such runaway visions. Macron will therefore seek support for his reforms from the EU’s southern countries that might stand to benefit. All this means that Merkel can only voice vague sympathy devoid of hard detail.
"As a result, the conversation will likely turn towards issues of common agreement, such as competitiveness or a collective asylum policy."
Professor Seán Hand, Deputy Pro-Vice-Chancellor (Europe)
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