Paris and Berlin at Odds Over Key Plank of Eurozone Reform Plans

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French president Emmanuel Macron’s plans to make common cause with Germany to reform the eurozone have suffered an early setback as Berlin pushes proposals for sovereign debt writedowns that Paris fears could shatter investor confidence in the single currency, the Financial Times reported. Mr Macron wants ambitious overhauls of eurozone governance ranging from the creation of a large common budget to the appointment of a European finance minister. Angela Merkel, the German chancellor, signalled last month that the proposals, part of a broader agenda for EU renewal, were a “good basis” for negotiations. But in a sign of how difficult it will be to find common ground on the euro, the German finance ministry has set out a blueprint that rides roughshod over some of Paris’s priorities. The paper entitled “Paving the way towards a Stability Union” was circulated ahead of a meeting of the eurogroup of finance ministers in Luxembourg on Monday. After Wolfgang Schäuble, Germany’s finance minister, outlined the German position on euro area reform at Monday’s meeting, diplomats said the paper had exposed key faultlines in the debate, notably over the treatment of sovereign debt in crises. Read more. (Subscription required.)