German Chancellor Angela Merkel and French President Emmanuel Macron have announced a plan for far-reaching reforms of the Eurozone, including the introduction of a single Eurozone budget and the establishment of a “European Monetary Fund”.

Merkel and Macron met for talks at the Meseberg castle outside Germany’s capital Berlin on Tuesday, June 19, 2018, hammering out their Eurozone reform plan while also agreeing to curb the influx of migrants into Europe, DW reports.

The Meseberg meeting has come against the backdrop of Eurozone reform figuring high on both key EU leaders’ agendas, just as the German Chancellor herself faces an intra-Cabinet conflict with her Interior Minister Horse Seehofer, the head of the CSU, the Bavarian sister party of Merkel’s CDU, over the ongoing migrant crisis in Germany and Europe.

“Mercron”, as the leaders of “Franco-Germany”, the primary engine of EU integration, may come to be called as a reminiscence to “Merkozy”, the neologism that used to denote the close partnership between Merkel and former French President Nicolas Sarkozy several years ago, have shaken hands on a number of key points.

They propose that the EU establish a single Eurozone budget to facilitate growth and convergence among the 19 member states using the common European currency. The new budget is to become operational as of 2021 although for the time being it remains unknown how it will be funded.

Merkel and Macron have also agreed that the European Stability Mechanism (ESM), which was founded in 2012 to help tackle the Eurozone crisis, should be transformed into a structure similar to a European monetary fund that is to provide loans to struggling EU states, cushioning new crises.

The German Chancellor, however, has been somewhat lukewarm on the French President’s desire to move towards a banking union; Merkel has argued that individual banking risks would have to be reduce for such an integration step to be taken.

“We are working to make sure that the Eurozone budget will be used to strengthen investment, also with the aim of strengthening convergence within the Eurozone,” Merkel stated, making it clear that it will be a “real budget with annual revenues and spending.”

On migration, Mercron have reached a consensus on the need to reduce the migrant influx into the EU, boost the staff of the EU border agency Frontex, and press for greater intra-EU solidarity for a joint European response to the refugee issue.

They have also agreed that the number of EU Commissioners should be reduced from the present figure of 28 in which every EU member state has one Commissioner, a measure that is likely to generate backlash from smaller EU members.

The Meseberg Castle reform proposals by Merkel and Macron are going to be discussed by all EU member state leaders at the European Council summit on June 28-29.

(Banner image: German Chancellor’s Office)