EU Integration – Macron and Merkel Explore Grand Bargain

While Germany wants France to respect the European budget policies and make its internal economy more competitive, France wants Germany to help on defense

Even though Chancellor Angela Merken and President Emmanuel Macron will get the chance to exchange their wishes at a joint cabinet meeting in Paris, the main issue for both of them won’t be on the official agenda. The issue of highest importance regards tighter governance of the European Union on topics such as euro debt management and security.

However, before it can be discussed publicly, the two of them must build a relationship based on trust: on one hand, Germany needs to see that Macron is making progress on its long overdue economic reforms; on the other hand, France wants Germany, as well as other rich countries, to support its military actions that benefit the entire European Union.

“There are large expectations of Merkel and Macron pushing together for a great European intergration. Macron wants to show the Germans that France can reform. And the Germans want to see it” said Martin Quencez, senior program officer at the German Marshall Fund of the United States in Paris.

Merkel has accepted Macron as an important ally since he won the May election, giving the EU unity and purpose as the UK negotiates its exit. Other key long term goals is a deeper integration of a single currency area.

The Trio Meeting

The ministers of France, Germany and Italy met on Monday night in Brussels and discussed the euro-zone governance. Germany’s Wolfgang Schaeuble said that he sees common ground with France: “We are thinking in the same direction,” he said.

“Germany accepts its responsibility, and I think the conditions to do this are the best they’ve been in a long time,” Merkel told a business group in Munich on Tuesday, citing Germany’s record-low unemployment, budget surplus and steady growth. “A lot depends on German-French relations.”

Thursday’s meeting, which is an annual event, brings negotiating some changes regarding France’s labor code, while also struggling to find the optimum spending cuts in order to meet the deficit targets set by the Euro zone.

Labor-market liberalization, as well as other reforms in France are “crucial for the credibility of Mr. Macron abroad — and particularly with Germany — to be able to push through his ambitious agenda of deeper European integration,” said Olivier Vigna.