Leftists Scholz and Sanchez try to coordinate on budgets and migration

MADRID/BERLIN, Jan 17 (Reuters) – German Chancellor Olaf Scholz and Spanish Prime Minister Pedro Sanchez will seek consensus at talks in Madrid on Monday on more leftist policies for Europe in areas ranging from fiscal policy to the migration.

The visit of Scholz, who took over from Conservative Chancellor Angela Merkel last month, is raising high expectations from Sanchez, with sources saying he sees the trip as a step in rebuilding the Madrid-Berlin axis .

“We got on well with Merkel’s government, but Scholz belongs to our social democratic family. There is more of an ideological adjustment,” a senior Spanish government official told Reuters.

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Achim Post, general secretary of the Socialist bloc in the European Parliament and a prominent member of the Scholz Social Democrats in Germany, noted that left-wing parties now rule Spain, Portugal, Germany and the Nordic countries.

He said he hoped Scholz and Sanchez, who are due to hold a press conference at 3:00 p.m. GMT, would seize the moment by pushing policies such as a fairer distribution of refugees among European Union countries.

“The fact that the Spanish and German governments are now both led by social democrats opens up new prospects for jointly strengthening cohesion and progress in Europe,” Post told Reuters.

Spain’s socialists, the PSOE, followed Scholz’s negotiations in November to form a coalition government with trepidation, fearing too many concessions to the liberals.

The emerging “traffic light” coalition with the Greens and the Liberal Democrats has reassured Europe’s social democratic family, however, a social democratic MEP told Reuters.

“Scholz’s and Sanchez’s positions won’t be exactly the same, but they won’t be contradictory either,” he said.

FRUGALS VS SPENDING MORE?

During the debt crisis of 2010, Germany was seen in Spain as one of the main members of the “frugals” of northern Europe who imposed financial restrictions and looked down on the “spendthrift” southern neighbors.

The Sanchez government sees Scholz’s visit as a start to breaking up these two blocs, the senior Spanish government official said.

“We will not abandon our agreements with Paris and Rome, which continue to be key partners,” he said, adding that a shared ideological position could allow Spain to bring Germany back into its way of thinking.

EU finance ministers will meet today to discuss returning to the stability pact suspended during the pandemic.

Madrid hopes to convince Berlin to back a set of looser fiscal rules for the eurozone also backed by France and Italy, setting GDP at more “realistic” debt reduction targets and slowing the reduction of the deficit.

The latest data shows that the eurozone average is close to 100% of GDP in debt, from Greece with a ratio of 207% to Estonia with 19%. Spain is at 122% and Germany at almost 70%.

“We need a new credible rule. Most major eurozone countries cannot meet the 60% target,” the Spanish source said.

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Reporting by Andreas Rinke and Belen Carreno, writing by Emma Thomasson, editing by Aislinn Laing and Ed Osmond

Our standards: The Thomson Reuters Trust Principles.

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