Monday 19 February 2018

Germany/France to draft joint proposals on ways to strengthen euro area

French President Emmanuel Macron and German Chancellor Angela Merkel plan to align corporate taxes. Photo: AFP/Getty Images
French President Emmanuel Macron and German Chancellor Angela Merkel plan to align corporate taxes. Photo: AFP/Getty Images

German politicians plan to draft joint proposals with France on ways to strengthen the euro area, taking up a call by French President Emmanuel Macron, according to a draft resolution.

The document, seen by Bloomberg ahead of a visit by German Chancellor Angela Merkel to Paris tomorrow, also says the euro area's two biggest economies should move ahead with aligning corporate taxes.

It's backed by the parties that make up Merkel's acting government and the opposition Green party and Free Democrats.

Even with Ms Merkel still trying to put together her next governing coalition, the efforts signal that Germany's political establishment want to reach out to Mr Macron sooner rather than later.

France's president has called for a range of steps to deepen the currency union, and the two leaders plan to meet in Paris tomorrow for talks on Europe.

Ms Merkel hasn't committed to any specifics of Mr Macron's proposals before having a fourth-term government and policy agenda in place.

Her goal is to present her response at a European Union summit in March.

A blueprint for a new German coalition agreed last week by Ms Merkel's Christian Democrat-led bloc and the Social Democrats calls for strengthening the euro area together with France and developing the European Stability Mechanism crisis backstop into a European monetary fund operating under EU law.

The resolution by the Bundestag, or lower house, calls for creating a working group with France to make "joint proposals on the further development and stabilisation" of the euro area by this spring.

Bundestag lawmakers plan to vote on the draft on Monday. In a September speech at the Sorbonne in Paris, Mr Macron urged closer cooperation on defence, migration and climate change policies, with the aim of laying the foundations for more financial integration of the euro area.

(Bloomberg)

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