Germany Moves to Speed Up Reply to Macron on Euro Proposals

(Bloomberg) -- German lawmakers plan to draft joint proposals with France on ways to strengthen the euro area, taking up a call by French President Emmanuel Macron, according to a draft resolution.

The document, seen by Bloomberg ahead of a visit by German Chancellor Angela Merkel to Paris, also says the euro area’s two biggest economies should move ahead with aligning corporate taxes. It’s backed by the parties in Merkel’s acting government and the opposition Greens and Free Democrats.

With Merkel still trying to renew her governing coalition, the efforts signal that Germany’s political establishment wants to reach out to the French president sooner rather than later. Macron has suggested ways to deepen the currency union and will host Merkel for talks on Europe on Friday.

Merkel hasn’t committed to any specifics of Macron’s proposals before having a fourth-term government and policy agenda in place. Her goal is to present her response at a European Union summit in March.

A blueprint for a new German coalition agreed last week by Merkel’s Christian Democrat-led bloc and the Social Democrats calls for steps to strengthen the euro area together with France, including a proposal to convert the European Stability Mechanism crisis backstop into a European monetary fund operating under EU law.

Euro ‘Slogans’

Merkel said Wednesday she could envision “limited” additional funding to aid investment in euro-area countries that received bailouts during the debt crisis. She remained noncommittal on calls for a European finance minister.

“That’s another one of those slogans,” she said in Berlin at a news conference with Austrian Chancellor Sebastian Kurz. “The real question is what the task ahead is. We’re talking about that with France and within the euro zone.”

The resolution by the Bundestag, or lower house, calls for creating a working group with France to make “joint proposals on the further development and stabilization” of the euro area by this spring. Bundestag lawmakers plan to vote on it on Monday.

A group of German and French economists on Wednesday proposed steps for overcoming policy rifts between euro-area countries. The proposals include allowing a member state to default without bringing down the whole currency bloc and simplifying budget rules.

©2018 Bloomberg L.P.