Canada 'associate member' label deepens rift between Merz and von der Leyen

A dispute over what to call the European Union's future relationship with Canada is deepening a split between European Commission President Ursula von der Leyen and German Chancellor Friedrich Merz, four diplomats have told POLITICO.

At the centre of the row is von der Leyen's proposal to make Canada an 'associate member' of the EU. Tensions worsened after the Commission president touted the phrase at a summit in Montreal, just hours after a German-led push removed the wording from a joint statement approved by 27 EU capitals.

Merz had previously floated 'associate member' as a status for Ukraine, as it works toward fully joining the bloc. After the idea was roundly rejected, including by Kyiv itself, officials in Berlin see von der Leyen's push to use the term for Canada as a rebuke of the German chancellor's initiative.

The clash over the phrasing illustrates a growing divide between Merz and von der Leyen over how the bloc should be governed, the diplomats said.

Berlin has said it will not approve the EU's next long-term budget, proposed by the Commission at around €2 trillion, unless 'hundreds of billions' are shaved off the total amount.

Von der Leyen's proposal for a European Security Council has also failed to gain traction in Germany, where the government has instead embraced a separate format with France and the United Kingdom for sensitive Ukraine-related matters.

'There is this institutional dilemma between Brussels and Berlin,' said Jan Techau, head of Germany for the Eurasia Group and a former speechwriter for the German defence ministry. 'Von der Leyen has taken a strongly integrationist approach to the EU while Merz has completely developed away from this and talks about the nation states as the primary driver of EU policy.'

A representative for Merz did not respond to POLITICO's request for comment. Neither Berlin nor Brussels is giving ground on the 'associate member' issue.

Berlin reiterated its opposition at a meeting of EU ambassadors on Wednesday, two of the diplomats said. But the Commission president has no intention of abandoning the label, according to a person familiar with her thinking.

'We're really focusing on building on the foundations that were set last week at the summit,' said Paula Pinho, chief spokesperson for the Commission, adding that Berlin and Brussels share the same basic goals regarding EU-Canada ties.

A German diplomat said: 'There is no difference in substance. We both committed to form a unique partnership that we don't have with any other country outside the European Union.'

The difference comes down to fine print, according to two EU diplomats. Von der Leyen's definition of the term, as applied to Canada, precludes the status from being offered to Ukraine. Instead of an intermediate step on the way into the EU, complete with prizes such as observer status in the European Council, associate member status would be granted to a country that could never be fully admitted to the EU, as von der Leyen acknowledged in her Montreal speech.

For Techau, the label dispute is a proxy for the wider argument running through core debates such as the budget and the bloc's security: whether the EU should be driven more by its common institutions or by its national governments. 'The issue is, in many ways, unresolvable,' he said.