Macron, Merkel Pledge Push to Settle Euro Differences by June

(Bloomberg) -- French and German leaders pledged to present a road map for a stronger euro area by June, signaling a push to overcome historic differences as Chancellor Angela Merkel begins her new term.

“For many years, Europe has waited for the French-German couple to move forward,” French President Emmanuel Macron said alongside Merkel in Paris on Friday. “That’s where we’re at and this is the road that’s now ahead of us.”

Macron’s sweeping proposals last year for deeper ties between the 19 euro-area countries have received a guarded response in Germany and were effectively put on ice by almost six months of post-election stalemate in Berlin, which ended Wednesday with Merkel’s swearing-in. Differences, including over risk-sharing within the euro area, remained on the table as the two leaders met at the Elysee presidential palace.

As a potential trade with the U.S. looms, Merkel said the European Union needs to stand united against threats to free trade and competition from emerging countries.

“We’ll be unbeatable as Europeans if we don’t allow ourselves to be divided,” she said. “Europe must stand united at a time when multilateralism is under pressure.”

Macron Ready

Macron warned against defeatism, saying European leaders must find responses to shocks such as Brexit, Italy’s election this month and rising populism. With Merkel’s full policy-making powers restored, he suggested it’s time for her to move forward.

“Dear Angela, I want to tell you how ready I am, how I’m waiting to begin our work together,” said Macron, who took office in May.

Earlier Friday, the finance ministers of both countries said the joint “road map,” to be ready for a European Union summit in June, would include issues such as banking union and aligning German and French taxes.

Open Differences

“It would be irresponsible to deny that we have differences, and that there are technical difficulties,” France’s Bruno Le Maire told reporters after talks with his German counterpart Olaf Scholz.

Scholz, whose Social Democrats generally favor bolder moves to tighten the euro area, said “we must move forward” on plans for what is known as banking union, which Macron wants to expand swiftly to include joint deposit insurance. He’s also calling for a euro-area finance minister and joint bond issuance to fund investment and research.

©2018 Bloomberg L.P.