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Merkel welcomes "a lot of material" from Macron on EU reform

BERLIN (Reuters) - German Chancellor Angela Merkel welcomes French President Emmanuel Macron’s speech on EU reform, her spokesman said on Wednesday, without giving details on how she would go about improving the way the European Union is run.

French President Emmanuel Macron delivers a speech to set out plans for reforming the European Union at the Sorbonne in Paris, France, September 26, 2017. REUTERS/Ludovic Marin/Pool

Macron offered a sweeping vision for Europe’s future in a speech on Tuesday, calling for the EU to cooperate more closely on defense, immigration, tax and social policy, and for the single currency bloc to have its own budget.

Merkel’s spokesman Steffen Seibert said Berlin shared Macron’s view that the EU needs reforms and that his speech contained “a lot of material” for debate on the issue.

“This discussion is necessary and sensible,” Seibert told a regular news conference, adding that EU leaders would have a chance to talk at a meeting in Estonia on Thursday.

Macron said he hoped his ideas would be taken into account in Germany’s coalition building negotiations, talks that are not expected to begin until mid-October and may take months.

His proposals drew mixed reaction from Germany’s pro-business Free Democrats (FDP) and the Greens, both possible partners in the coalition government Merkel will form after her center-right CDU/CSU bloc won a Sept. 24 election albeit with a much reduced share of parliamentary seats.

In a sign that her Christian Democratic Union might block Macron’s plan for a joint euro zone budget, Eckhardt Rehberg, the most senior CDU member on parliament’s budget committee, said: “The problem in Europe is not a lack of money.”

Rehberg pointed to existing instruments to boost investments such as the EU budget, the so-called Juncker fund (EFSI), the euro zone bailout fund (ESM) and European Investment Bank (EIB).

“And not to forget the ECB’s monetary policy,” he added.

Rehberg said it was more important to discuss how existing funds could be used better and that member states must implement their own reforms to increase competitiveness and clean up their budgets.

“The taxpayers of other countries cannot relieve them of this duty,” Rehberg told Reuters.

Germany’s biggest industry association, BDI, called Macron’s proposals “courageous but not uncontroversial”.

“Europe now needs speed in the reform discussion,” BDI chief Joachim Lang said.

Macron’s proposals for a joint euro zone budget and a common finance minister were at least worth discussing, Lang added.

The influential economic institute Ifo described Macron’s speech as an invitation for Germany to join the “brainstorming” about the EU’s future.

“A stronger EU would certainly make sense in the areas of foreign, defense and trade policy,” Ifo head Clemens Fuest said.

“But Macron’s plans for the euro zone are wrong, from my point of view.”

Fuest said the euro zone’s problems would not be solved by creating a finance minister or budget for the 19-member bloc.

“It would be more important to ensure more stability in the financial sector and to reconcile liability and control in economic and financial policy,” he said.

Fuest was among a group of top German and French economists who issued a joint statement on Wednesday made calling on Paris and Berlin to shift their stances on EU reforms.

Additonal reporting by Paul Carrel and Andreas Rinke; Writing by Michael Nienaber; Editing by Raissa Kasolowsky and Robin Pomeroy