Merkel reaches out to Macron on European Union reforms

Posted June 04, 2018

The force is a key element of Emmanuel Macron's proposals to reform European defence and integrate the continent's many militaries more closely together. Most Eastern European states have shunned the deal, leaving countries like Greece and Italy complaining of unfair burdens.

"I will approach the new Italian government openly and work with it instead of speculating about its intentions", Merkel told the paper in an interview published on Sunday.

Merkel made the remarks in an interview with the Frankfurter Allgemeine Sonntagszeitung when asked about a media report that the anti-establishment 5-Star Movement and far-right League had planned to ask the European Central Bank to forgive 250 billion euros ($296 billion) of Italian debt. She said the initiative should bring down the number of different European Union weapon systems from 180 to "about 30". The ECB issued a statement saying the European treaties would not allow for such a move in the first place.

She proposed offering short-term credit lines to stricken countries, but maintained strict conditions for support: "always subject to special conditions of course, for a limited amount and with complete repayment". Merkel also said that a future EMF would be organised on an intergovernmental basis and national parliaments of member countries would have oversight. "This is very pleasing", SPD leader Andrea Nahles told the ARD public broadcaster.

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Merkel backed the step-by-step introduction of a euro zone investment budget in the low double-digit billions of euros, saying this could be housed within the European Union budget or outside.

Addressing European defense, Ms. Merkel said she supported Mr. Macron's proposal for closer military integration but insisted it must function within the existing EU defense cooperation structure, known as Pesco.

Italy's government was sworn in on Friday, ending months of political turmoil, but investors remain nervous as it promises to increase spending, slash taxes and challenge European Union fiscal rules.

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