Other European countries are forming an anti-austerity alliance against Angela Merkel
Mediterranean economies have been devastated by an EU-wide policy of austerity enforced from Berlin, which has led to massive youth unemployment and soaring poverty.
Fiscally conservative Germany, which is the EU’s largest economy, is reluctant to loosen the purse strings and authorise the huge injection of cash many other member states need to kickstart their fortunes.
The leaders of France, Italy, Spain, Portugal, Cyprus and Malta are planning to meet in Athens next month to forge a new anti-austerity alliance with the aim of wrestling back control of the European Central Back (ECB), which sets Eurozone fiscal policy, from Berlin.
It is being headed up by Greek premier Alexis Tsipras, who has frequently clashed with both Mrs Merkel and Brussels over the crippling austerity which has brought his country to its knees.
The new group is being fronted by Greek PM Alexis Tsipras
It has been prompted by huge economic stagnation in southern Europe
The leaders want the group to push for a pro-growth agenda and will now hold their first meeting in the Greek capital on September 9, according to the Athens News Agency.
During the talks they will focus on the “common” challenges facing southern EU countries on an economic, political and institutional level and particularly on austerity, fiscal discipline and migration.
Mr Tsipras is looking to spearhead a relaxation of crippling austerity and the introduction of more “flexibility” into EU budget surplus requirements set by Brussels.
The participation of France – traditionally seen as the EU’s second most powerful member – will lend huge weight to the project and may make it difficult for Mrs Merkel to continue to resist calls to loosen the purse strings.
Countries such as France, Italy, Greece, Spain, and Portugal face similar challenges
But any move to unleash massive spending to kickstart southern European economies could prove very unpopular with German voters, who would ultimately be required to foot the bill.
Pressure is now growing from across the continent though. In April, Mr Tsipras and the Portuguese premier Antonia Costa signed a joint declaration claiming that EU austerity-driven policies are “wrong”.
The two left-leaning leaders said that “austerity policies are keeping economies depressed and societies divided” as they upped their rhetoric against German fiscal conservatism.
It is believed the recent Brexit vote has accelerated the plans for an alliance with French social democrat MEP Gilles Pargneaux saying it had made politicians “rethink the way we do things in Europe”.