France, Germany celebrate friendship amid crisis

France's President Francois Hollande (R) and Germany's Chancellor Angela Merkel (2nd L) follow Bishop Thierry Jordan (2nd R) as they arrive for a ceremony in Reims Cathedral, July 8, 2012. The two leaders met in the northern French city of Reims to commemorate the 50th anniversary of renewed Franco-German relations after World War II.

REIMS, France (Reuters) - The leaders of France and Germany joined in a symbolic celebration of unity on Sunday, hailing a relationship that has brought peace to Europe for 50 years but must now prove it can survive its most serious crisis to date.

Taking a pause from more than two years of constant crisis management that has strained Franco-German ties, President Francois Hollande welcomed his German counterpart, Chancellor Angela Merkel, to the city of Reims in eastern France.

The event replicated an encounter in 1962 between former French president Charles de Gaulle and German Chancellor Konrad Adenauer, when the two leaders enshrined Franco-German ties in a city that once bore the brunt of shelling in World War One.

But while De Gaulle and Adenauer's encounter sealed a reconciliation after two wars, Sunday's meeting was held against a backdrop of acrimony over how to handle Europe's debt crisis.

"The European Union is going through a crisis - it won't be the first, it won't be the last," Hollande said in a speech by the giant double-doors of Reims' Notre Dame Cathedral, where French kings were once crowned. "But ... it forces us to move toward a new phase of development."

"Mrs Chancellor, I propose to you that we, together, walk through a new door to years that will make the friendship between our two countries even deeper," he added.

The meeting was a faithful reenactment of the 1962 encounter - down to the lunch menu. Even the rainy weather was the same.

Like their predecessors, Merkel and Hollande stood side-by-side to review a parade of French and German troops before listening to a children's choir in the cathedral's knave, where one of the most famous photographs of De Gaulle and Adenauer was taken.

Lunch, hosted by Michelin-starred French chef Philippe Mille, was a historical throwback: cold salmon, filet of beef with peas, braised carrots and potatoes, with raspberry macarons for desert. The meal was accompanied by three bottles of vintage Champagne from the region.

UNDERCURRENT OF TENSION

For people who witnessed the first Reims meeting, the progress since that day from friendship to a political and economic union is a subject of wonderment.

"This was a historical turning point," said Pierre Maillard, a former diplomatic advisor to the French presidency, in a documentary produced by the OFAJ Franco-German Office.

"The idea of an association of interests between our two countries was nothing short of revolutionary," he said, noting that public opinion in France at the time was stacked against the idea of a partnership with Germany.

But underneath the sense of elation about the past, anxiety over the present ran high as the euro zone - the crowning legacy of Franco-German entente - struggles to restore confidence in the creditworthiness of its peripheral members.

Greece remains a particular source of strain, with fears of a forced exit from the euro surging after Greece's new leaders admitted it was off-track in meeting terms of a bailout plan.

The crisis has exposed differences between France and Germany on how to proceed with the European project. While Merkel wants Europe to form a fiscal union that would give Brussels more oversight over national budgets, France resists any intrusion into budgetary issues.

Hollande, meanwhile, faces Germany's refusal on the idea of mutualising European debt via jointly-issued euro bonds, with German public opinion staunchly opposed to any efforts to make them underwrite European partners' debts.

Last week, as euro zone leaders sat down for talks in Brussels, tensions spilled over as President Francois Hollande declared that he was on the side of Italy and Spain in negotiations - breaking the Franco-German common front.

In subtle ways, such differences were acknowledged in speeches by the two leaders. Hollande referred to countries' need to "retain sovereignty" within the European Union, while Merkel emphasized efforts towards deepening political integration.

"We are currently going through a major challenge, which Europe must overcome," said Merkel. "The European Union that was created 20 years ago does not appear to be strong enough ... We must do what was not done 20 years ago to complete the political union."

As the celebration came to a close, a French news report provided a reminder that French and German achievements toward peace were not to be taken for granted: a few kilometers north of Reims, vandals had desecrated the graves of about 40 German World War One soldiers.

(Writing by Nicholas Vinocur; Editing by Pravin Char)