- Together with Macron, Merkel sketched out the backbone of the 750 million-euro ($840-million) fund proposed by von der Leyen to bolster the bloc's economy.
BERLIN: Chancellor Angela Merkel hosts French President Emmanuel Macron for talks on Monday, days before Germany takes on the rotating presidency of the European Union with an economy mired in the worst crisis since World War II.
Berlin's chairing of the 27-member bloc will be the last with Merkel in charge, and could be the one that defines the legacy of the leader dubbed the "eternal chancellor".
With the future of the bloc's relationship with Britain still to be determined, a shift to a lower-carbon world in the balance and deteriorating US-China ties all jostling for attention, there is no shortage of burning issues to tackle.
But it is the coronavirus pandemic and the economic devastation it has wrought that will concentrate minds.
"This crisis that we're currently experiencing is different compared to any other we have experienced since the founding of Europe," Merkel, in power since 2005, told parliament in an address laying out Berlin's priorities for the EU presidency.
"In Europe alone, it has claimed more than 100,000 lives. A few weeks of economic standstill was enough to endanger what we have built up over years."
Member states are anxiously looking to Europe's biggest economy to take charge.
European Commission chief Ursula von der Leyen said it was "very fortunate that Germany is taking over the presidency at this time of a major crisis".
Merkel's long experience and credibility "helps enormously", she told the Handelsblatt newspaper on Saturday.
Germany takes on custodianship of the bloc with a strong hand as it has withstood the health emergency better than most other member states.
Once an obstinate champion of budgetary rigour, Merkel's government has ditched its no-new-debt dogma to throw resources at the crisis.
Its programme to shore up the economy totals more than one trillion euros in spending, loans and guarantees.
Together with Macron, Merkel sketched out the backbone of the 750 million-euro ($840-million) fund proposed by von der Leyen to bolster the bloc's economy.
The fund would offer grants with no repayment obligation to countries hardest hit by the pandemic, a major policy U-turn for Berlin.
With an eye on the devastating blow taken by Spain or Italy, Merkel explained that it was "imperative that Germany not only thinks of itself but is prepared for an extraordinary act of solidarity".
Foreign Minister Heiko Maas also vowed: "We want to use this unprecedented crisis to set in motion unprecedented changes in the European Union."
The recovery fund is likely to be among the key points raised when Merkel and Macron meet at a German government retreat Meseberg on Monday.
Despite opposition from fiscal hardliners such as Austria and the Netherlands, observers believe Berlin will ram through an accord.
"When the Germans are certain they are right, it's very bulldozer, there is no margin for discussion," a high-ranking EU official said.
An EU diplomat agreed, saying: "On the recovery fund, I expect Germany to dictate the whole process. Merkel is holding all the cards and (EU Council chief) Charles Michel will follow that.
"She also wants to get Brexit out of the way and she will always go for the deal as she wants to keep the West together. The third leg will be restoring ties with US after the election there."
Merkel, who has ruled out running for a fifth term next year, will not have much time.
Brexit talks will have to be done by the year's end, and in November the focus will be on whether US President Donald Trump wins reelection.
What is clear is that Merkel's fingerprints will be all over the EU's roadmap through the next six months.
"This will be a very Merkel presidency, her swan song," said the EU diplomat, adding that she would be using it "to craft her legacy".