Angela Merkel and Emmanuel Macron moved to tackle the European Union's growing list of problems on Tuesday calling for a limited common Eurozone budget by 2021, a beefed-up border police force to deal with migrants and deeper defence co-operation.

In a joint declaration in the German town of Meseberg, the French and German leaders also pledged to sign a new Elysee Treaty by the end of the year to strengthen the 1963 agreement that ended centuries of hostility between their two countries.

But analysts warned that behind the carefully staged show of unity, deep differences remain between them over the future direction of Europe.

“A new chapter opened for the Europe Union and for Franco-German cooperation today,” Mrs Merkel said.

“This summit comes at a moment of truth for Europe, for each of the nations of our continent,” Mr Macron added. “Today there is a real choice of society, even civilisation that is up for discussion.”

The meeting came after months of back-channel discussions in which both sides tried to close the gap between their divergent visions for the European Union and the Eurozone, with both leaders making some concessions to the other.