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German Chancellor Merkel appears open to compromise on EU reforms

Berlin has been sceptical in its response so far to the possibility of a shared budget.

German Chancellor Angela Merkel has signalled her willingness to find compromises with France when it comes to reforming the European Union, as she hosted French President Emmanuel Macron for talks Thursday in Berlin.

Mr Macron has outlined ambitious plans for greater economic integration across the 28-nation bloc, but his proposals have met resistance in some member countries, including among conservatives in Ms Merkel’s party.

Ms Merkel, who was recently confirmed for a fourth term at the head of Europe’s biggest economy, said at the very least she is willing to talk.

France's President Emmanuel Macron, left, is calling for reform to the EU (Markus Schreiber/AP)

“There are of course always different starting points when it comes to the opinions of Germany and France,” she told reporters at a joint news conference with Mr Macron.

“We need open debates — and in the end we need the ability to compromise.”

While Germany and France agree on the need to better protect the EU’s external borders and forge a common asylum policy, it is unclear how much backing Mr Macron can expect from Germany for his plans to reform the bloc’s financial structure.

In their deal to form a new German government, Ms Merkel’s conservative party and its centre-left partners agreed that Germany — like France — is prepared to pay more into the EU budget.

But Berlin has been sceptical in its response so far to the possibility of a shared budget and Ms Merkel is lukewarm about Mr Macron’s idea of a eurozone finance minister.

The French president made clear he will not drop his demand for greater financial solidarity, particularly among the 19 countries that share the euro as a currency, which includes both Germany and France.

“No currency union can survive if there aren’t instruments for convergence,” Mr Macron said, citing the need for a banking union — something Germany has resisted for fear of being held liable for future bailouts abroad.

Ms Merkel said Germany would be willing to agree in the long term to a pan-European deposit insurance scheme, but insisted that solidarity should not undermine economic competitiveness among the bloc’s economies.

Guenther Oettinger, the EU’s budget chief and a member of Ms Merkel’s conservative party, weighed in on the debate on Thursday by saying Europe’s current economic strength should be used to prepare for potential future crises.

“Now is the time to make the economic and currency union, and therefore the eurozone, weather proof,” he said in a clear message to his own party.

A failure to agree upon fundamental EU reforms in the coming months could scupper further efforts until after the 2019 European Parliament elections, as mainstream parties shy away from proposals that might play into the hands of populists.

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