The Franco-German talks were dominated by the €750bn (£683bn, $844bn) European Union recovery fund as chancellor Angela Merkel met French president Emmanuel Macron at Meseberg Castle in Brandenburg on Monday.
This was also the German chancellor’s first in-person meeting with a foreign leader since the coronavirus outbreak in Europe.
At a press conference following the meeting, both leaders reaffirmed their commitment to the recovery fund, and underlined the importance of keeping the EU strong.
“We are living in a serious time,” Merkel said at their joint press conference. “On the one side there is the pandemic and the associated economic challenges on the other.”
Merkel and Macron had already jointly pushed for a €500bn recovery package in May, financed by the joint-borrowing by EU member states. They proposed that the European Commission (EC) should be authorised to borrow the money on the financial markets.
“We are constantly evaluating what conclusions we have to draw from the pandemic,” Merkel said. “We are living in the middle of the pandemic—and the fact that we do not see the virus does not mean that it is gone.”
Merkel continued that together the two leaders wanted to show that “Europe is our future,” noting that the crisis “will continue to have an impact for a long, long time.”
Macron praised the strength of the Franco-German relationship, and said that the plan for economic recovery of the EU formed the core of their discussion on Monday afternoon.
"I see the importance of what we have done together over the past few weeks," said Macron. "We have demonstrated our resilience to the crisis. I see what we have done in the past two years. Now we have come to the moment of truth for Europe. We can turn the moment of truth into a moment of success."
EC president Ursula von der Leyen proposed a debt-financed €750bn EU recovery fund towards the end of May, with €500bn of that to be issued as non-repayable grants to countries.
The fund however needs unanimous approval from every EU member, but Austria, the Netherlands, Sweden and Denmark — known as the Frugal Four — have said they are against assuming joint debt to support other states.
Getting all 27 states to agree on the financial package this month is a top priority for Germany as it takes over the rotating presidency of the EU Council on 1 July.
The pressure is on leader of Europe’s largest economy to push through not only the rescue fund during the German presidency of the council, but also to guide the EU through the final stages of agreement on the Brexit trade deal with the UK.
On Monday, Merkel said that “expectations were high” for Germany.
Merkel said that in addition to the EU Recovery Fund, the other major issue during her country’s presidency includes climate protection and the goal for the bloc to be climate neutral by 2050. “How European trade is organised will therefore play a major role,” she said on Monday.
The chancellor told the Bundestag recently that Germany’s main task during its six-month presidency is to ensure that the coronavirus pandemic does not threaten EU integrity or weaken the single market.
"The German presidency of the council will take a different course than we had planned,” Merkel said last month. “It will be clearly dominated by the issue of combating the pandemic and its consequences.”
Von der Leyen, who has also served as Merkel’s defence minister, said at the weekend that it was “very fortunate that Germany is taking over the presidency at this time of a major crisis.”