Germany, France paper over euro cracks in show of unity

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Reuters: Berlin, Jan 22 2013, 09:08 IST
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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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