Angela Merkel and Emmanuel Macron ‘open new eurozone chapter’

Angela Merkel and Emmanuel Macron have agreed a landmark eurozone budget charged with boosting investment in the bloc and promoting economic convergence between its 19 states.

The French president has long advocated wide-ranging reforms to strengthen the eurozone and insulate the single currency union from future crises.

The centrist president was elected on a platform of strengthening the eurozone and promoting EU integration, and has staked his political future on being able to draw EU countries together politically and economically.

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Last year, Macron laid out an ambitious plan for an integrated Europe, calling for a single defence budget, an EU defence force and a shared budget for eurozone countries.

While Europe’s economy has picked up and there is no immediate sign of financial stress, Reuters says “many analysts maintain that reforms are needed to protect the single currency”.

However, Merkel, who is wary of growing anti-EU sentiment at home and under pressure to curb migrant arrivals, has struck a more cautious approach to further EU integration, in the past opposing the idea of a significant eurozone budget because it would entail more risk sharing and fiscal transfers, says the Financial Times.

But while the proposals appear to fall short of Macron’s ambitious vision set out last year, in what appears a major victory the French president, the beleaguered Merkel said the budget agreement represented a “new chapter” for the eurozone.

“We are working to make sure that the eurozone budget will be used to strengthen investment, also with the aim of strengthening convergence within the euro zone,” she added. “Because we know that a economic and monetary union can only remain intact if economic policies converge.”

Details of the budget, including its amount and whether it would be financed by national sources or a bloc-wide tax, will now be hammered out by ministers before the end of the year.