Germany, France signal unity in race to revive economy after discord

German Chancellor Friedrich Merz and French President Emmanuel Macron have demonstrated unity in how to revive Europe's ailing economy after recent public disagreements.

"We want to speed up the European Union, we want to make it better, and we want to ensure that we have a competitive industry in Europe," said Merz, as he arrived at a meeting of EU leaders on Thursday.

The talks at the Alden Biesen Castle close to Rijkhoven in eastern Belgium focuses on how to respond to stifling global competition and take on internal challenges to unlock growth.

Approaches in Berlin, Paris and beyond to addressing these issues however differ.

Merz has been advocating for less red tape to reduce the reporting burden on businesses, reducing trade barriers between EU countries and more free trade agreements.

Macron has called for joint debt, which Germany opposes, is a stern opponent to a recent free trade deal between the EU and four Latin American countries and pushes the idea of giving preference to European companies.

Speaking alongside in Rijkhoven, Merz and Macron signaled that their positions are moving closer.

"I believe we share this sense of urgency, that our Europe must take very clear action," said Macron.

The French president stressed that France and Germany would in particular agree on harmonizing capital markets across the EU.

The European Commission has proposed streamlining national rules to create a so-called savings and investment union. Harmonizing financial rules in Europe has, however, proven difficult in the past.

Frustration over low speed of reforms mounts

Europe's economic issues, including high energy prices, extensive bureaucracy and low growth rates, have been persistent for years.

EU leaders gathered in at the Alden Biesen Castle are not expected to decide on policy reforms but are to pave the way for decisions expected in March and the coming months.

Two landmark reports on the bloc's economic hurdles, written by former Italian prime ministers Mario Draghi and Enrico Letta, were considered wake-up calls at the time of their publication in 2024.

The report by former European Central Bank (ECB) chief Draghi is arguing that the EU requires massive investments and a new sense of unity if it wants to remain economically relevant.

In January however the European Policy Innovation Council concluded that only 15% of the recommendations put forward by Draghi have so far been fully implemented.

On the evening of the Rijkhoven summit, leading European industry representatives urged EU leaders to take on the bloc's economic challenges with a greater urgency.

"We urge you to move from diagnosis to delivery, and from plans to results, with a single objective: Save our industry. Not next year, not next week, but today," a joint industry statement read.