France and Germany are working on a joint economic initiative to put to their European Union partners at a summit in June, French President Francois Hollande said Wednesday. It would be the first Franco-German initiative since the French Socialist leader took office a year ago. Hollande said at the close of an EU tax and energy summit that he and Chancellor Angela Merkel were planning talks "so we can adopt together a joint contribution" for the next June 27-28 meeting of EU heads of state and government.

German Chancellor Angela Merkel's coalition partners kicked off their campaign to stay in government at the weekend, brandishing the French economy as a warning against German opposition policies. Under the slogan "With us Germany remains strong", the pro-business Free Democratic Party (FDP) presented itself as a bulwark against Germany losing its economic footing, at a congress in the southern city of Nuremberg on Saturday and Sunday.

German Finance Minister Wolfgang Schaeuble said a new anti-euro party "can't be taken seriously" and labelled its core demand "economically insane" in comments published Sunday. The small Alternative for Germany (AFD) party wants to ditch the euro and bring back the Deutschmark currency. It has called for an "orderly dissolution" of the 17-member eurozone. Formed only weeks ago, it has scored between two and five percent in a series of polls, five months ahead of elections in which Chancellor Angela Merkel will seek a third term.

By Stephen Brown BERLIN (Reuters) - Germany's opposition Social Democrats (SPD) do not believe the time for debt and deficit reduction in Europe is over yet, but see a need to focus more on growth to combat unemployment in southern Europe, a top SPD politician told Reuters. As Europe debates whether it can stand more of the austerity led by Chancellor Angela Merkel, whom the SPD aims to oust in an election in September, Frank-Walter Steinmeier said he did not think the European Commission was ready to call the dogs off.