FRANCE and Germany plotting to merge borders, economies and defence policies in the latest step towards an EU superstate.

The neighbouring countries are to forge together policies in areas including terrorism and transport in an unprecedented "twinning" pact just two months before the UK is due to leave Europe.

3 Macron and Merkel, pictured here in Aachen, will return to the spa city on January 22 to sign a treaty for greater cooperation Credit: EPA

In line with the agreement, regions on either side of the Franco-German author will be encouraged to form "Eurodistricts", The Times reports.

Germany's Chancellor Angela Merkel is due to meet with French President Emmanuel Macron on January 22 in Aaachen, a town symbolic for its common history as well as location on the border.

The treaty extension, negotiated over the past year though short on details, stipulates that it will be a priority of German-French diplomacy for Germany to be accepted as a permanent member of the United Nations Security Council.

Under the plans, ministers will also be able to sit in on each other’s Cabinet meetings. There are also aims to promote closer cooperation between national intelligence services and police in fighting terrorism and organised crime, as well as a commitment to moving towards economic convergence.

3 France and Germany are set work closer together on economic policy as well as cooperation between their police, health and transport services Credit: AFP

Other areas of cooperation include culture, health, innovation and transport.

In Paris, Macron's office said the Elysee Treaty extension would help both European powers tackle "the challenges they will be confronted with in the 21st century".

"(We) envisage deepening our engagement in favour of security and prosperity of our peoples in the framework of a more sovereign, united and democratic Europe," it said.

The two governments will agree to hold “regular consultations on all levels before major European meetings, and take care to establish common positions and issue joint statements”.

3 The border city of Aachen is to host the historic treaty signing on January 22 Credit: Getty - Contributor

It adds: “They will stand up for a strong and effective common foreign and defence policy, and strengthen and deepen the economic and currency union.”

But critics say the treaty will be a "juggernaut capable of crushing dissent beneath its wheels", The Times reports.

Germany's appointment to the security council could cause some issues in Brussels, where it is felt that it should be awarded to the EU.

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The treaty will also face considerable opposition by parties on the far left and right.

Alexander Gauland, leader of the far right Alternative for Germany party, has described it as an "erosion of our national sovereignty".

While in France, Marine le Pen, formerly of the far-right National Front, described it as an "unbalanced" diktat from Germany.

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