European Union - Merkel sees new European bailout tool to handle future crises

European Union - Merkel sees new European bailout tool to handle future crises

European Union - Merkel sees new European bailout tool to handle future crises

German Chancellor Angela Merkel's proposals on euro zone reforms show progress and are a clear move closer to the French position, a French government source said on Sunday. Earl Howe, the junior defence minister, said last month: "It will help to achieve what we are looking for, which is a deep and special partnership with our European colleagues in defence and security".

Merkel's comments, made in a speech in Berlin on Monday, build on a newspaper interview published the previous day in which she laid out her response to French president Emmanuel Macron's proposals to reform and strengthen the single currency region.

The chancellor also said she backed an investment budget for the euro zone, which would be in the low two-digit billions of euros that would be introduced step by step and evaluated over time to address structural weaknesses of member states.

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".

"France and Germany still need to work on these subjects in the coming weeks for a more ambitious accord on banking union and the fiscal capacity for the eurozone", an official at Mr. Macron's office said on Sunday. The introduction of the budget, she said, should happen in several stages based on the assessment of its effectiveness.

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

German officials have increasingly voiced their frustration with the US government's decisions to abandon key global accords, including the Iran nuclear deal, and impose restrictions on worldwide trade that threaten Germany's large export sector. That falls well short of Mr. Macron's proposal that envisaged an instrument with budgetary firepower of around EUR200 billion ($233.2 billion).

However, Merkel's composure has not necessarily been reflected elsewhere in Germany. In terms of migration, she wants common asylum standards, a European border police force and a pan-European migration agency, saying that countries that refuse to take on refugees could compensate with contributions in other areas.

Reports say a major trading war is brewing between the United States and its closets allies after the imposition of new tariffs which could see USA consumers pay more for everything from canned soup to cars.

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