German Chancellor Angela Merkel and U.K. Prime Minister David Cameron were unable to reconcile their differences on plans for European treaty changes and a financial transaction tax at a meeting in Berlin on Friday.
Though earlier today the two earlier restated their commitment to a strong Europe, they continue to disagree on the best course of action to restore financial stability.
Merkel said any changes to EU treaties to allow for greater fiscal integration should require the approval of the 17 nations sharing the euro, while Cameron wants changes to be approved more widely by all members of the union, allowing the U.K. to take back powers from Brussels.
Cameron also suggested Germany support calls to allow the European Central Bank to fund purchases of troubled sovereign debt. Earlier this week, he rebuffed Merkel’s call for political union in Europe, dismissing it as a “utopian vision.”
Though both Merkel and Cameron have the same goal — to see the Europe through its debt crisis — they have divergent views on how to fix the problems plaguing the 27-nation union and make its economy more competitive.
Merkel signaled earlier this week that Europe must work with the existing tools to fight the debt crisis, and believes better budget enforcement is needed, which “involves limited treaty change for members of the euro zone,” and only members of the euro zone. Meanwhile, Cameron wants to use changes to Europe’s governing rulebook to leverage concessions from EU partners.
“It’s obvious we don’t agree on every aspect of European policy, but I’m clear that we can address, accommodate and deal with these differences,” Cameron said today. “We had a discussion about the issue of the treaties. Germany has her interests and so does Britain. ”
The two also disagree over the implementation of a financial-transaction tax that the European Commission says would raise 57 billion euros a year. While Germany has been on the forefront of calls for a European transaction tax, Cameron opposes such a tax, fearing it could disadvantage London as a global financial center.