Germany makes concessions for closer eurozone fiscal policy

German Chancellor Angela Merkel is hoping an agreement between the eurozone countries to tighten budget controls will lead to a more stable euro.

The 17 member states and six other EU countries reached an agreement for an intergovernmental treaty that will strengthen fiscal rules and curb excessive deficits.

“Yesterday it was necessary to avoid making a bad compromise for the euro. We succeeded. Everybody will see that we learned from past mistakes, that we showcased credibility and that, therefore, European institutions, for instance the Commission and the Court of Justice, will have greater influence and greater powers to get nations to behave more responsibly when it comes to fiscal matters,” Merkel said.

Germany has also given up trying to get the private-sector to bear some of the costs of the bailouts given to European countries, after Merkel backed down after two years of pushing for bondholders to accept losses from debt-restructuring.

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