Merkel Offers a Carrot to Italy But Keeps the Stick in Reserve

Merkel Offers a Carrot to Italy But Keeps the Stick in Reserve

Merkel Offers a Carrot to Italy But Keeps the Stick in Reserve

Deeper military cooperation could help reduce complexity and overlapping systems, and could be extended to the United Kingdom after it leaves the bloc next March, Ms. Merkel said.

French President Emmanuel Macron waves next to German Chancellor Angela Merkel as he arrives to receive a Charlemagne Prize in Aachen, Germany May 10, 2018.

She said that while solidarity among members of the single currency bloc was important, "solidarity among euro partners should never lead to a debt union, rather it must be about helping others to help themselves".

Germany's Bundeswehr would not need to participate in all such European missions, Merkel said, and would join "to the extent of the possibilities of a parliamentary army".

Institutional changes to the European Union would ensure that "its voice is taken seriously in the world", she said.

Merkel's comments came as investors are wary of the impact of Italy's new populist government on the eurozone.

The proposals, to be presented at an EU leaders' summit later this month, were welcomed by the European Commission, the EU's executive body.

The Trump administration's decision to impose steel and aluminium tariffs has been denounced by the G7 ahead of a summit on Friday, with all members minus the USA jointly expressing "unanimous concern and disappointment" about the move.

Merkel said Europe needed "quicker economic convergence" but stopped short of Macron's vision of a major investment budget, saying, in euros, it should be "at the lower end of the double-digit billions" and only phased in gradually.

Merkel said in Sunday's interview that she supports creating a European Monetary Fund - similar to the International Monetary Fund - that could help stabilize the eurozone by offering long- or short-term loans to member nations. Merkel on Saturday congratulated Italian Prime Minister Giuseppe Conte in a phone call on Saturday and invited him for talks in Berlin, her office said.

It was, however, said Paris, the "first answer" from Merkel since last September when Macron outlined his plan to Sorbonne University students, including a tax to fund a stronger eurozone budget, and closer environmental and military measures.

Macron has repeatedly expressed impatience with what he sees as foot-dragging by Merkel, who was tied up with five months of coalition building after an inconclusive general election in September.

To deal with Europe's migration flux, Macron called for a European asylum agency and standard EU identity documents.

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