MADRID (AP) — German Chancellor Olaf Scholz and Spanish Prime Minister Pedro Sánchez met Monday in the Spanish capital to align their left-wing agendas and plan how to boost progressive policies in the 27-nation European Union.

After taking over last month from Angela Merkel as leader of the EU’s most populous nation and its largest economy, Scholz joined Sánchez in a select group of progressive EU politicians holding office. Both leaders also head unprecedented coalition governments in their respective countries.

Germany and Spain share the goal of using part of the bloc’s unprecedented 750 billion-euro ($855 billion) fund for pandemic recovery to complete the “green transition” and “digital transformation” of their economies, Sánchez said Monday after the talks, something he said should be done upholding social justice values.

But differences existed on whether nuclear and gas-generated energy should qualify for sustainable investment — a debate that has confronted several major EU nations — as well as the bloc’s reexamination of its migration and asylum policies and tight EU fiscal rules on national debt that were suspended during the pandemic, Sánchez said.

The Spaniard said, nevertheless, it was possible to find common ground in future talks with Scholz.

Standing at the stairs of the Moncloa Palace, which hosts the Spanish prime minister’s office and residence in the outskirts of Madrid, Sánchez called Scholz “a friend.” The meeting with Sánchez, a fellow member of the European Socialists’ group, marked Scholz’s first foreign trip this year, after visits to Paris, Brussels and Rome since taking office.

Asked about tensions along the border between Russia and Ukraine, both leaders called for Russia to deescalate, with the German chancellor describing the situation as “very, very serious.”

“We expect clear steps from Russia to deescalate the situation,” Scholz said, adding that “military aggression against Ukraine would entail serious political and economic consequences (for Russia).”

Madrid in June is hosting a major conference of the North Atlantic Treaty, or NATO, in which members of the defense alliance are expected to introduce new strategic guidelines.