Germany, France paper over euro cracks in show of unity

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Germany, France paper over euro cracks in show of unity. (Reuters) Germany, France paper over euro cracks in show of unity. (Reuters)
SummaryBoth sides say little of substance will come out of the meetings in Berlin.

to bridge their deep differences on how to push Europe forward.

The French president swept into office in May last year vowing to reverse Merkel's focus on budget consolidation in Europe, launch new growth-boosting initiatives and end the "exclusive" relationship with Germany he accused his conservative predecessor Nicolas Sarkozy of nurturing.

But his victories have been more symbolic than substantive. After a brief flirt with Italy and Spain in the second half of 2012 that spawned talk of a new anti-German southern bloc within Europe, Hollande has turned back to Berlin, keen not to be lumped too closely with the euro's troubled periphery at a time when France's own economy is wobbling and in need of reform.

"Hollande is under a great deal of pressure at home," an adviser to Merkel said. "On European issues he remains very vague. He is still in a learning process."

In Paris, there are also frustrations. The appointment of Dutch Finance Minister Jeroen Dijsselbloem - an unknown on the European scene - to the post of Eurogroup chairman was seen as an example of the kind of lowest-common-denominator compromise that gives Franco-German cooperation a bad name.

Yet officials in both capitals play down the differences between the two leaders, describing their relationship as friendly and stressing the similarities in temperament. Hollande, unlike the often hyperactive Sarkozy, is reserved and modest, like Merkel.

At a joint appearance with French and German students on Monday evening in Berlin, the two leaders talked about harmonising corporate tax rates within Europe.

On Tuesday, their governments are due to issue a joint statement announcing a will to work on new areas of cooperation, including on youth policy, culture, energy and defence.

But both sides say little of substance will come out of the meetings in Berlin.

"Merkel and Hollande will send a political message that Germany and France will continue to work together on the construction of economic and monetary union," one official in Berlin said. "But don't expect a new dimension in bilateral cooperation."

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