Head of Germany's FDP offers Macron 'bittersweet' euro zone deal

By Michael Nienaber

BERLIN (Reuters) - A leading candidate to be Germany's next finance minister signalled his willingness on Thursday to seek a compromise with Emmanuel Macron over the French President's plans for deeper euro zone integration.

Christian Lindner, who leads the Free Democrats (FDP) party negotiating to be part of Chancellor Angela Merkel's next coalition government, said European policy was one of the most important topics in the talks.

Lindner said Macron -- who last month called for a joint euro zone budget and joint finance minister among other reforms -- had described political progress as a question of finding a balance between carrots and sticks.

"Let's take him literally (on this) on the European question," Lindner said at a book launch.

"That means if he wants to get something, he'll have to accept other things - for example an insolvency mechanism for states or for example the binding participation of private investors in any debt restructuring if it should be necessary," he said.

"This would be the bitter thing he would have to swallow to get something sweet - namely additional funds for investments," Lindner said.

Veteran outgoing Finance Minister Wolfgang Schaeuble, wary of anything that might leave German taxpayers shouldering common euro zone debts, has been generally lukewarm about Macron's reform plans.

Lindner may succeed him under the three-way coalition that Merkel is trying to form after her conservatives lost support in a federal election last month.

It has been widely speculated that the FDP would demand the top finance post as a price for joining in, though Lindner on Thursday stopped short of claiming the ministry for his party.

Earlier this week, he had insisted that Merkel's Christian Democrats (CDU) should relinquish it.

Lindner has repeatedly criticised Schaeuble, a fiscal hawk, as being too soft on Greece and putting loyalty to Merkel ahead of his own political convictions.

Asked which characteristics the next German finance minister should have, Lindner said: "Being consistent."

(Reporting by Michael Nienaber, editing by John Stonestreet)