Merkron? France's Macron seeks close ties with Germany to shore up EU

[May 15, 2017]  By Paul Carrel

BERLIN (Reuters) - Chancellor Angela Merkel hosts new French President Emmanuel Macron in Berlin on Monday for talks in which they will seek to reinvigorate the Franco-German relationship and the troubled European project that it underpins.

Macron, who was inaugurated on Sunday, will ram home the message that the European Union is resilient despite Britain's vote to leave and a spate of financial and migration crises that have boosted the far-right across the bloc.

The 39-year-old former investment banker meets Merkel a day after her conservatives won a regional vote in Germany's most populous state, boosting her quest for a fourth term in office after a national election due on Sept. 24.

With Germany's economy, Europe's largest, outperforming that of France, the traditional Franco-German motor at the heart of the EU project has begun to misfire. Merkel and Macron want to kick-start ties with an alliance some German media have dubbed "Merkron".

Merkel said at the weekend she wanted close cooperation with Macron and that their two countries would do everything to shape European policy. But her ruling coalition is at odds over how to respond to his calls for closer EU integration.

"Demands like a euro zone finance minister are really dreams," European Commissioner Guenther Oettinger, a German conservative, said before a meeting of Merkel's Christian Democratic Union (CDU) in Berlin.

But he added: "The euro zone must be strengthened. The euro zone needs a more coherent, common approach."

GERMAN FEARS

Many conservatives around Merkel, fearful the euro zone could develop into a "transfer union" in which Germany is asked to pay for struggling states that resist reforms, are skeptical of Macron's calls for closer integration.

Last week Foreign Minister Sigmar Gabriel of the center-left Social Democrats (SPD) - junior partner in Merkel's coalition - accused Finance Minister Wolfgang Schaeuble of the CDU of trying to "torpedo" Macron's EU reform plans for political reasons ahead of Germany's election in September.

French President Emmanuel Macron arrives to deliver a speech during his inauguration at the handover ceremony at the Elysee Palace in Paris, France, May 14, 2017. REUTERS/Francois Mori/Pool

Gabriel was reacting to comments from Schaeuble suggesting that Macron's idea of creating a budget and finance minister for the euro zone were unrealistic because they would require politically thorny changes to the EU treaty.

Macron, a convinced European integrationist, pledged after taking office on Sunday to restore France's standing on the world stage, strengthen national self-confidence and heal divisions that the bitterly-fought campaign had opened up.

Macron beat Marine Le Pen of the far-right National Front in a May 7 run-off vote, but the long campaign exposed deep splits over France's role in Europe, immigration, and policies to revive a sluggish economy bedeviled by high unemployment.

A former economy minister under France's previous president, Socialist Francois Hollande, Macron is the youngest post-war French leader and the first to be born after 1958, when President Charles de Gaulle set up the Fifth Republic.

Merkel, 62, has been chancellor since late 2005, when Jacques Chirac was French president. Europe's 'Franco-German motor' has often worked best in the past when leaders of opposite political persuasions have been in power.

(Additional reporting by Andreas Rinke; Editing by Gareth Jones)

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