“We think that, in view of the agenda [at the EU leaders summit], this distracts a little from what it’s actually all about, namely that we have a productivity problem,” a senior German government official, who is close to the chancellor, said on Tuesday
Ahead of a summit of European Union leaders scheduled for Thursday, German Chancellor Friedrich Merz’s government has rejected French President Emmanuel Macron’s call for a joint EU borrowing scheme.
In an interview with six European media outlets published on Tuesday, Macron urged Europe to introduce new common borrowing, often referred to as eurobonds, to boost investment in strategic sectors. He framed the proposal as an economic necessity if the bloc is to remain competitive with the United States and China.
According to a Politico report, Berlin dismissed the proposal just hours after the interview was published, underscoring continuing divisions between France and Germany on key economic and political issues.
The disagreement marks the latest in a series of tensions between Macron and Merz, who have clashed in recent months over trade policy and approaches to dealing with US President Donald Trump.
“We think that, in view of the agenda [at the EU leaders summit], this distracts a little from what it’s actually all about, namely that we have a productivity problem,” Politico quoted a senior German government official, who is close to the chancellor and was granted anonymity to speak candidly, as saying on Tuesday.
“It is true that we need more investment,” the official said. “But to be honest, this belongs in the context of the Multiannual Financial Framework,” the official added, referring to the bloc’s budget for 2028-2034, which is currently being negotiated.
Berlin’s rejection of Macron’s proposal came ahead of an EU leaders’ retreat at a Belgian castle on Thursday, where competitiveness is set to dominate discussions.
While the bloc’s 27 leaders are not expected to agree on concrete outcomes, the meeting is intended to identify key priorities for a follow-up EU summit scheduled for March in Brussels.
Ahead of the meetings, Berlin is pressing for three main objectives: deepening the EU’s single market, accelerating and expanding trade agreements, and reducing bureaucracy, according to Politico, citing German official.
On competitiveness, Chancellor Friedrich Merz has increasingly diverged from Macron, who has advocated more protectionist policies and an interventionist industrial approach. Merz has instead moved closer to Italian Prime Minister Giorgia Meloni on economic policy.
The German government has also called for sweeping reforms to the EU budget.
“It cannot continue as before, with two-thirds of the budget going exclusively to consumptive spending in the areas of agriculture and cohesion,” the official said.
“We hope that the member states that are now calling for new funding will also participate in these reform efforts. It cannot be that people call for more money but then fail to tackle the reforms.”
The official added, “European over-indebtedness does not come without a cost.”
With inputs from agencies
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