France and Germany mark treaty

Meeting on the 50th anniversary of the pact sealing their post-war reconciliation, the leaders of Germany and France vowed to bridge differences on the shape of Europe's currency union and unveil joint proposals on deeper integration within months.

Angela Merkel, a conservative, and Francois Hollande, a socialist, have had an uneasy relationship since the French president swept into office eight months ago vowing to reverse German-backed austerity policies designed to shore up the crisis-hit euro zone.

But the two leaders, born less than a month apart in the summer of 1954, stressed their common values and hailed the importance of the Franco-German partnership after centuries of conflict that culminated in two world wars and led historians to speak of a "hereditary enmity".

"The young people of our countries have the great fortune to have never known anything but peace and democracy," said Mr Hollande, speaking in the Reichstag building in Berlin to a joint session of parliament.

But he added that the youth now faced "an economic and social crisis of unprecedented duration", requiring common efforts to boost economic output and create jobs.

Dr Merkel, speaking earlier at a joint news conference with Mr Hollande, said the leaders would tackle one of the most divisive issues between the two countries - deeper economic and fiscal integration - and present joint proposals before a summit of EU leaders scheduled for June.

She also said she would support a French candidate to run the new European bank supervision body that is to become operational next year, under the umbrella of the European Central Bank.

The three-year-old debt crisis that started in Greece and even threatened to envelop France at its peak has exposed structural deficiencies in Europe's grand currency experiment, forcing its members to consider closer cooperation.

But Berlin and Paris have starkly different visions of what a closer currency union should look like, with Dr Merkel favouring tighter central controls over budgets and Hollande seeking more solidarity, in the form of a big euro zone budget to deal with economic shocks.

"It is about a deeper cooperation in economic policy with the goal of social security, employment, growth and financial stability," Merkel said of the joint proposals that are to be presented by May.

The Treaty of Friendship signed at the Elysee Palace in Paris in 1963 by Germany's Konrad Adenauer and France's Charles de Gaulle buried the hatchet almost two decades after the second World War ended.

Perhaps the most powerful image of reconciliation came in 1984 when Helmut Kohl and Francois Mitterrand - mentors of Dr Merkel and Mr Hollande - held each other by the hand at the site of the Battle of Verdun, where 700,000 of their countrymen died in the first World War..