January 16, 2018 / 8:41 PM / a month ago

Austria's Kurz sceptical on euro zone budget ahead of Merkel meeting

BERLIN (Reuters) - Austrian Chancellor Sebastian Kurz told a German newspaper ahead of talks with German counterpart Angela Merkel that he was sceptical about the creation of a new euro zone budget after German parties agreed to back the idea.

Merkel’s conservatives and the SPD last week agreed on the blueprint for a governing coalition in which they also raised the prospect of an “investment budget” for the single currency bloc, a nod to French President Emmanuel Macron’s call for a budget to help the euro zone cope with external economic shocks.

When asked to comment on the coalition blueprint, Kurz told Frankfurter Allgemeine Zeitung newspaper in an interview to be published on Wednesday that he shared the goals of making Europe more transparent and increasing its competitiveness.

“I‘m much more sceptical about certain considerations regarding the euro zone, such as a possible euro zone budget,” Kurz said.

Germany and Austria normally have the same stance on euro zone issues and Kurz’s comments could signal a rare rift between the two countries on a subject seen as crucial for strengthening the 19-member single currency bloc.

Merkel will host Kurz for talks on Wednesday, with both expected to give a news conference in the early afternoon.

The question of how to improve governance of the euro zone will also be discussed when Germany’s acting Finance Minister Peter Altmaier hosts his Portuguese counterpart Mario Centeno, president of the Eurogroup of euro zone finance ministers, for talks in Berlin on Wednesday.

(This version of the story deletes redundant word from first paragraph)

Reporting by Michael Nienaber; Editing by Robin Pomeroy

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