Southern EU Leaders Seek Stronger Ties as Trump Stokes Tension

(Bloomberg) -- Leaders of the European Union’s southern nations called for stronger bonds in the bloc after U.S. President Donald Trump stoked trade tensions with Mexico.

“If there’s something that’s clearer today than it was before the U.S. elections, it’s that more than ever the world needs a strong and united Europe,” Portuguese Prime Minister Antonio Costa told reporters Saturday after a meeting of seven national leaders in Lisbon.

Trump threw U.S. relations with Mexico into turmoil this week by demanding America’s southern neighbor pay for a border wall. Meanwhile, the president is calling for a more level playing field with China, in addition to having pulled the U.S. out of a proposed 12-nation Pacific Rim trade accord.

“Protectionism isn’t in our genome, in European genes,” French President Francois Hollande said. “Yet we need to be clear. We don’t want to open up our markets under any old conditions. We’re for balanced trade relations. That’s also the essence of what we’ll bring to the conversation with the U.S., with the new American administration.”

Hollande and Trump will speak later on Saturday for the first time since the Jan. 20 inauguration, a French official said.

“We will find the best ways to cooperate with the new American administration,” Italian Prime Minister Paolo Gentiloni said in the Portuguese capital. “We are absolutely ready, interested and available to cooperate, but we are Europe and we’ll keep our values high and strong.”

Europe needs to narrow disparities between stronger and weaker national economies, Costa said, along with coordination with the plans of the European Central Bank.

“We need a new cycle of economic and social convergence,” the Portuguese premier said. “A better coordination of budget policies, and of budget policies with the ECB’s policy are essential conditions for growth and employment.”

Costa said one of the conclusions of Saturday’s meeting was that the “evolution” of the European Stability Mechanism to a European monetary fund would allow better management of sovereign debt and use of funds for investment to help promote growth and jobs.

To contact the reporters on this story: Anabela Reis in Lisbon at areis1@bloomberg.net, Lorenzo Totaro in Rome at ltotaro@bloomberg.net, Alan Katz in Paris at akatz5@bloomberg.net. To contact the editors responsible for this story: Vidya Root at vroot@bloomberg.net, Jerrold Colten at jcolten@bloomberg.net, Joao Lima, Steve Geimann