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Merkel offers Macron concessions on eurozone reforms
BERLIN, June 3, 2018 (BSS/AFP) – German Chancellor Angela Merkel delivered a
long-awaited answer to French President Emmanuel Macron’s ambitious call for
European Union reforms Sunday, offering olive branches on investment and help
for debt-mired eurozone member states.
More than a year after Macron took office with the stated mission to
bolster the EU and make it more responsive to its citizens, Merkel’s response
comes at a time of heightened concern about the future of the bloc due to
political turmoil in Italy and Spain and transatlantic tensions.
Merkel told the Frankfurter Allgemeine Sonntagszeitung ahead of a crunch EU
summit this month that Germany as the eurozone’s top economy would support an
investment budget whose total would be “at the lower end of the double-digit
billions of euros range”.
She said the “rainy day fund”, as it has been dubbed, would serve to help
even out economic imbalances between richer and poorer European countries
“which need to catch up in the areas of science, technology and innovation”.
“We need quicker economic convergence between the member states,” she said.
“To do that we have to strengthen investment capability with the help of
additional structural policies,” she said, adding that the fund would be
phased in gradually and then evaluated in terms of its effectiveness.
– ‘Don’t wait, act now’ –
Merkel also addressed plans to upgrade the European Stability Mechanism
(ESM), which oversees bailout loans to troubled member states, such as
Greece, into a European Monetary Fund.
She proposed offering short-term credit lines to stricken countries, but
maintained strict conditions for support: “always subject to special
conditions of course, for a limited amount and with complete repayment.”
Germany and France, traditionally seen as the twin engines of European
integration, plan to hold talks before the EU summit at the end of the month
to coordinate their positions on reform.
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The EU summit is seen as the last chance before European elections in May
2019 to get a few tangible projects on the road and demonstrate to frustrated
voters Europe’s ability to deliver on its promises.
Macron has repeatedly expressed impatience with what he sees as foot-
dragging by Merkel, who was tied up with five months of coalition building
after an inconclusive general election in September.
“Don’t wait, act now,” he said as he picked up a prize in Aachen last
month, urging Germany to overcome its “fetish” for budget and trade surpluses
and back reforms even if it meant loosening the purse strings.
Crises roiling Europe have focused minds in recent days, with a populist
and eurosceptic government taking power in Italy and Spain ousting veteran
Prime Minister Mariano Rajoy over a corruption scandal and his Socialist
arch-rival Pedro Sanchez taking over.
In addition, transatlantic relations have grown increasingly rocky due to a
series of combative decisions by US President Donald Trump, including
scrapping the 2015 Iran nuclear deal and imposing tariffs on steel and
aluminium imports.
BSS/AFP/SR/1600 HRS