The leaders of Germany and France agreed on Tuesday to create a budget for the euro zone and hailed a “new chapter” for the currency union, but they left the details to be worked out later with other members of the 19-country bloc, reports Reuters.
Their meeting, to prepare for an EU summit on June 28-29, had been dubbed a “moment of truth” for bilateral relations by France’s finance minister, as Paris has pressed Berlin for months to agree reforms to crisis-proof the bloc.
After meeting at Chancellor Angela Merkel’s Meseberg retreat outside Berlin, she and France’s Emmanuel Macron agreed the new budget would be charged with boosting the bloc’s economic competitiveness.
Macron said it would be operational by 2021, but their plans lacked further detail.
“We are opening a new chapter,” Merkel said after the talks, which produced an eight-page declaration entitled: ‘Renewing Europe’s promises of security and prosperity’.
Merkel said the budget would be used to strengthen economic convergence within the euro zone, which was almost torn apart by a multi-year debt crisis that took hold in 2009.
“We know that an economic and monetary union can only remain intact if economic policies converge,” she said, adding that euro zone reform was the toughest issue in the talks, which also touched on European foreign and defense policy and immigration.
French President Macron, who last September laid out a sweeping vision for euro zone reform and spoke of “rebuilding Europe”, was forced to defend the agreement when pressed by journalists.
“It will be a real budget, with annual revenues and spending,” he said.
“This is a political commitment we make together which will require technical work at the ministerial level by the end of the year, and then indispensable treaty change the year after.”