Angela Merkel embarks on last-minute tango in Paris

Chancellor to be pressed about her appetite for EU reform

Acting German chancellor Angela Merkel arrives at a memorial ceremony for the deceased former president of the German parliament Philipp Jenninger in Berlin. Photograph: Clemens Bilan/EPA

Acting German chancellor Angela Merkel arrives at a memorial ceremony for the deceased former president of the German parliament Philipp Jenninger in Berlin. Photograph: Clemens Bilan/EPA

 

Germany’s acting chancellor Angela Merkel heads to Paris on Friday for a hastily arranged meeting with French president Emmanuel Macron. The question hanging over their meeting: why now?

Ostensibly, they are marking the 55th anniversary of the Élysée Treaty of 1963: the foundation stone of modern, peaceful Franco-German relations after centuries of bitter rivalry that culminated in the terror of the Nazi occupation.

Both parliaments, in Paris and Berlin, will mark the anniversary with special sittings on Monday – the actual anniversary. So why are the two leaders anxious to meet three days earlier, in a meeting announced only on Wednesday?

A well-placed Berlin source said: “This was the only window available, after the end of [German coalition] exploratory talks and before possible coalition talks.”

It’s an explanation that raises more questions than it answers, given the delicacy of Germany’s slow-motion trudge to a new government.

Sunday sees an extraordinary party conference of Dr Merkel’s would-be coalition partners, the centre-left Social Democratic Party (SPD). Party delegates will meet in Bonn to vote on a preliminary coalition agreement from last Friday. Without their backing, formal coalition talks cannot proceed.

With mutiny in the air, SPD leader Martin Schulz has been criss-crossing the country in an exhausting campaign to win over doubters.

One of his key arguments is that thanks to him, the new Berlin coalition has prioritised EU reform and backs Mr Macron’s proposals to reform and revitalise the bloc.

Merkel has finally blinked

After months of Berlin keeping the continent dangling, Mr Schulz – and friends of the Macron reform proposals around Europe – embraced last week’s Berlin paper as a sign that Dr Merkel has finally blinked. She has made clear since that she doesn’t think so.

The agreement’s three pages aspire to strengthen the EU, boost European competitiveness and strengthen the European parliament.

They also agree to “specific budgetary means for economic stability and social convergence . . . which can be a starting point for future investment budget”. 

To reflect Merkel allies’ concerns, the agreement supports such loans only with strict conditionality to avoid moral hazard from would-be loan recipients.

In addition, Berlin promises to contribute more to the EU budget, without saying how much, and to support plans – previously floated by Dr Merkel and former German finance minister Wolfgang Schäuble – to transform the ESM bailout fund into a permanent, European Monetary Fund.

The German leader has kept her options open on whether any future budgetary funds should be drawn from general EU funds or comprise a special euro zone budget.

On Wednesday, alongside Austrian chancellor Sebastian Kurz, she said she was “sceptical” of [French] calls for a new euro zone finance minister.  That echoes her pre-election approach to EU reform best described as “form follows function”.

“I don’t start with a finance minister, I start with the tasks and then the question poses itself how they can best be addressed,” said Dr Merkel this week. “We’re talking about this with France and inside the euro zone. We are not at the end.”

She is likely to be pressed at the Paris press conference about her appetite for reform, two days before Mr Schulz’s crunch meeting on Sunday with ambivalent party delegates.

Even if they back coalition talks, some 430,000 rank-and-file SPD members will have the final word on whether their party should join a new grand coalition.

Pressure is building on Berlin. When Mr Macron presented his reform proposals in September, he hoped to have agreement by January. With a German government now likely by Easter at the earliest, EU officials are pressing for a reform agreement by June.