Paris welcomes Merkel's 'first answer' to Macron's European Union reform plan

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In her most detailed comments on Macron's vision, Merkel supported the idea of turning the euro zone's ESM rescue fund into a European Monetary Fund (EMF) with powers to give members hit by sovereign debt troubles short-term credit lines. "We can additionally open that initiative to a country like Great Britain", Merkel said.

In her message of congratulation to Conte, a law professor with no political experience picked to head the coalition, Merkel said that she looked forward "to continuing and to further deepening our close partnership", reminding him that "Italy and Germany have close and friendly relations in all areas - political, economic and cultural". "In the future we will have to react to the challenges that we are faced with", she said. "The strategy of working together is the only way to strengthen the euro zone and the European Union".

Merkel's comments came as investors are wary of the impact of Italy's new populist government on the eurozone. Former German foreign minister Joschka Fischer called her silence a "scandal" and Timothy Garton Ash, the author and Oxford historian, labelled it "pathetic".

Germany and France, traditionally seen as the twin engines of European integration, plan to hold talks before the EU summit at the end of the month to coordinate their positions on reform of the bloc after Britain's exit next year.

Pressure on the EU to show a united front has grown following U.S. President Donald Trump's decision to pull Washington out of the Iran nuclear deal and to impose tariffs on European steel and aluminium exports.

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Merkel and Macron are due to present their ideas at an European Union summit on June 28-29. That falls well short of Mr. Macron's proposal that envisaged an instrument with budgetary firepower of around EUR200 billion ($233.2 billion).

Macron wants to turn Europe's existing bailout fund into a European Monetary Fund (EMF), to act as a buffer in any future financial crises in the bloc, which was almost torn apart in a debt crisis in 2009. The idea partly stems from a desire to reduce Europe's dependency on the International Monetary Fund, but it is also driven by German concern that the European Commission is becoming more politicized and that enforcement of fiscal rules should be trusted to a new, independent body.

Commenting on the issue, Paris said that it was the "first answer" from Berlin since Macron outlined his plan of European Union integration to Sorbonne University students.

Merkel also called for European cooperation on migration and asylum programs. Italy, however is of a whole other dimension, they said.

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