Merkel's plans for the European Union: joint military force, common migrant asylum standards

Italy's Debt Burden       More than 600 billion euros of Italy's debt matures in the next three years.                      Source Bloomberg

Italy's Debt Burden More than 600 billion euros of Italy's debt matures in the next three years. Source Bloomberg

French President Emmanuel Macron waves next to German Chancellor Angela Merkel as he arrives to receive a Charlemagne Prize in Aachen, Germany May 10, 2018.

Euro reform efforts are also focusing on completing the so-called banking union, with the establishment of a backstop for a fund to help wind down failed banks and a common deposit insurance scheme.

The League and 5 Star each need to renegotiate treaties on budgets, migration and a variety of different points with the European Union. She said she wanted to work with the new Italian government instead of speculating about its intentions.

Chancellor Angela Merkel was among the first to congratulate her Italian counterpart, Prime Minister Giuseppe Conte, but if necessary she is prepared to make clear to the new government in Rome that it must stick to the fiscal rules governing the euro area, according to two German government officials.

"We need to make ourselves a little more independent from the worldwide monetary Fund", - said Merkel. Mrs Merkel said she welcomed the opportunity to involve Britain in the force. "I am in favor of President Macron's proposal for an intervention initiative", the German chancellor told Frankfurter Allgemeine Sonntagszeitung newspaper. "Those are totally new notes from Mrs. Merkel".

Merkel also said that a future EMF would be organized on an intergovernmental basis and national parliaments of member countries would have oversight.

"We all agree that we need to strengthen ESM, and we stand ready to discuss the exact modalities", Dombrovskis said.

Merkel's former finance minister Wofgang Schäuble issued a more severe renegotiation of the debt terms, proposing an automatic mechanism for sovereign debt-restructuring to reduce the future costs of bailouts and enforce more discipline among profligate governments. The 40-year-old French leader has called for a deeper overhaul that would see eurozone countries share more resources and liabilities in a budget as large as several percentage points of eurozone economic output. Conte, a little-known 53-year-old law professor, was sworn in on Friday, ending three months of political deadlock in the wake of inconclusive March 4 elections. League leader Matteo Salvini, Italy's new interior minister, has said that Italians "aren't the slaves" of European Union powerhouses Germany and France.

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