PARIS (Reuters) - German Chancellor Angela Merkel heads to Paris on Thursday for talks with President Francois Hollande aimed at coming up with new ideas to strengthen management of the 17-country euro zone and boost European industry.
The meeting comes a day after European Union authorities granted France an extra two years to meet deficit-cutting targets and as Berlin tones down its campaign for budgetary rigour, which critics say has helped push Europe into recession.
Yet while Paris and Berlin are at odds over whether the EU should in coming days risk a trade dispute with China by imposing punitive duties on its solar panel exports, the two insist relations are good between the euro zone’s two largest economies and the two traditional drivers of the European Union.
“Our relations are very regular, very normal and very efficient,” a French diplomatic source in Hollande’s office said ahead of the one-day meeting between the Socialist French leader and his conservative German counterpart.
“We may start from different positions but each time we work it out,” he added.
Concerned about becoming a scapegoat for a European slowdown that has triggered social unrest in southern nations such as Greece, German officials have in past weeks tempered their rhetoric of austerity to talk of balancing the need to cut deficits with the need to create jobs.
Speaking in January at the start of celebrations to mark the 50th anniversary of a friendship pact between the former World War Two foes, Merkel and Hollande promised to come up with joint proposals on greater eurozone cooperation, boosting industrial competitiveness and job creation for next month’s EU summit.
Few details have yet to emerge on the plans, and officials on both sides have privately played down expectations of any major European policy initiative ahead of a September election in Germany in which Merkel is seeking to win a new term.
At the talks in Paris on Thursday, the two will also receive recommendations from a group of French and German industrialists on fostering European industrial champions able to compete for global trade with U.S. and Asian rivals. (Reporting by Mark John; editing by Andrew Roche)