German, French leaders propose Eurozone budget

BERLIN (AP) - The leaders of Germany and France agreed Tuesday to create a Eurozone budget they hope will boost investment and provide a safety mechanism for the 19 nations using the euro currency, and also to seek a European solution to migration issues.

The announcement from German Chancellor Angela Merkel and French President Emmanuel Macron came after a meeting in Berlin to coordinate the two major powers' positions on the future of the European Union ahead of next week's EU summit.

Though Merkel had been lukewarm on Macron's idea of a European budget, in a declaration adopted by both leaders following the meeting they said they had agreed upon a proposal to establish one aimed at "competitiveness and convergence."

"It could finance new investments and come in substitution of national spending," they said.

Merkel said the two also agreed to enhance the effectiveness of the European Stability Mechanism, or ESM, which was established in 2012 to provide eurozone nations access to financial assistance in the event of crisis.

"We are opening a new chapter," she said.

Macron said details were intentionally being kept general on the budget idea at the moment, so that other member nations would be able to have their voices heard. He said the idea is for the budget to be in place by 2021 as a "backstop to ensure financial stability."

On migration, Merkel's insistence on finding common European solutions to reducing migrant numbers and other issues has met stiff resistance in her own conservative bloc, leading to a showdown over the last week with her interior minister who has insisted some categories of migrants should be turned away at Germany's borders.

On Monday, a potential crisis was averted after Interior Minister Horst Seehofer and his Bavaria-only Christian Social Union agreed to give Merkel two weeks to make deals with other European countries on migrants - specifically after the upcoming EU summit.

In their joint declaration, the leaders cautioned that "if member states started to act unilaterally, this would end up in an overall increase of migration into Europe."

Merkel told reporters she was still convinced that Europe needed to work together to combat the causes of the refugee flow by helping improve conditions in the countries of origin while at the same time increasing security at Europe's outer borders and cracking down on smugglers.

"Our goal remains a European answer to these challenges," she said.

Macron agreed to the need for "a European response to the challenge of migration," saying Europe must have "more capacity" to monitor its external borders but also more "solidarity mechanisms both outside and inside our borders" faced with migrant arrivals.

Both leaders said they wanted to increase personnel at Frontex, Europe's border security agency.

"We want more sovereignty and unity," Macron said. "We're at a moment of truth in Europe."

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Thomas Adamson in Paris contributed to this report.