German Chancellor Angela Merkel has pledged the euro zone would take crucial steps by March to strengthen economic stability.
She spoke after meeting with Spain’s King Juan Carlos and Minister Jose Luis Rodriguez Zapatero in Madrid one day before a European leaders’ summit in which France and Germany plan to present joint proposals to make the region’s economies more competitive.
The united front presented by Merkel and Zapatero contrasts with last year were Germany and Spain were at odds on how to deal with the debt crisis and support the euro.
Merkel told reporters: “In the last couple of months I have often pointed out that if the euro fails Europe will fail. It is all about Europe, and so Germany supports the euro, but it is obvious that we need more solidarity and at the same time the desire to measure ourselves against the best in order to increase our capacity to compete.”
Merkel added Spain is on the right road with its crisis measures, sending a message to international investors who have been worried Madrid is not doing enough to cut its budget deficit to avoid a bailout as was needed by Greece and Ireland.
Spain has found it easier to borrow money since announcing pension reforms last week and after it was revealed the country’s savings banks have lower-than-feared exposure to its crippled property market.