Merkel and Orban clash over migrant policy amid European Union divisions

Lorries being checked on the German border

Lorries being checked on the German border

The two sister parties reached a compromise on Monday night to introduce new border regime on the border between Germany and Austria.

Viktor Orbán, controversial prime minister of Hungary, said on Thursday in Berlin, during a joint press conference with German Chancellor Angela Merkel, that her country will not accept asylum seekers returned by Germany under Dublin rules.

Seehofer also announced that he will meet next week with his Italian and Austrian counterparts for talks aimed at restricting the Mediterranean sea route used by migrants heading to western Europe.

German Chancellor Angela Merkel said Wednesday that the European Union will make every effort to avoid a trade war with the United States, and underlined her country's commitment to raise defence spending gradually - another point of contention with Washington.

Mr Sehofer said he would hold talks with Italy and Greece about sending back migrants who had been registered there.

The two sides have agreed on a plan to hold migrants seeking to enter Germany from Austria in transit centers from where those who have sought asylum elsewhere in the European Union will be sent back to that country.

Later in the evening, representatives of Merkel's conservative bloc and junior coalition partner Social Democrats meeting in Berlin agreed to streamline asylum procedures and to bring a revised immigration law before the Cabinet this year, said Andrea Nahles, the head of the Social Democrats.

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"But it is clear that the negotiations are exclusively being held at a political level", it said in a statement. "That is why I am pleased we've found a solution".

Kurz - whose country's border with Italy includes the Brenner pass, an important north-south transport link - was more explicit about what might happen if a deal with Italy was not reached.

Austria, which took over the EU's rotating presidency on 1 July, wants to strengthen the EU's external borders while avoiding internal controls on the continent.

She has agreed bilateral deals with a number of countries, including Spain and Greece which are on the front line of migrant arrivals. In her opinion, the unit should sign agreements with African countries to ensure legal migration.

However German media report that most of the irregular migrants entering Germany do not go through Austria anyway. The SPD had warned such centers could be seen as internment camps.

The FT said that three diplomats said the European Commission was studying whether it would be feasible to negotiate a deal with other big auto exporters such as the US, South Korea and Japan.

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