Macron and Merz hold the keys to a European budget deal – but could be too weak to use them – POLITICO

Reaching a deal on the EU’s long-term central budget, worth around 2 trillion euros, is the biggest challenge facing leaders in the coming months, all of whom must approve the final figures. Although it does not depend solely on Macron and Merz, getting the leaders of the bloc’s two most powerful countries to overcome their differences would be a major step in putting all the pieces of the puzzle in place.

But with Macron soon to leave office and Merz under intense pressure domestically, officials and diplomats in Brussels, Paris and Berlin are playing down hopes of a Franco-German breakthrough this week.

“If French and German leaders join hands, I think it could be a game-changer,” said a European diplomat, who requested anonymity to speak candidly. “It takes (Italian Prime Minister Giorgia) Meloni and (Polish Prime Minister Donald) Tusk, but it starts with Merz and Macron.”

Although Merz and Macron could talk bilaterally at the summit, according to an Elysée official, there were no firm plans for a more formal meeting, two European diplomats said, adding that they expected them to use the two-day meeting to hammer out their positions.

Weak domestic politics makes the two leaders less likely to give ground, three European diplomats said.

Flashback

For the French president, who will leave office next year, the fear is that big concessions – such as accepting budget cuts demanded by Berlin – could be used by the presidential candidates vying to replace him.

“Macron should not appear too conciliatory” during budget negotiations, said an ally of the French president. “It would backfire on the presidential campaign.”