Germany will do all it can to fight the eurozone debt crisis but Berlin cannot solve the bloc’s problem’s alone, Chancellor Angela Merkel said on Thursday.
She told the lower house of parliament that Germany is “the engine of growth and anchor of stability in Europe” but that its “strength is not unlimited.”
Merkel also said that the best solution to balancing government books across the EU is a mixed policy favouring both growth and austerity, rather than a simple choice between one or the other.
“We have always in mind that strengthening of growth and budget consolidation need to go hand in hand. By the way within all the programmes approved by the troika, it is these two pillars that belong together in the management of the crisis in Europe – and both of them are essential,” she said.
US Treasury Secretary Timothy Geithner has also backed Germany’s call for EU wide structural reforms.
Speaking in Washington yesterday, he highlighted the bloc’s main priorities ahead of next week’s G20 summit.
“What Germany is saying is (that) to make monetary union work, (they’re) prepared to put a substantial commitment of resources behind this broader endeavour,” Geithner said.
“But for that to work, (it) needs to be in support of reforms and changes in the institution … and that is a very reasonable position.”
EU leaders are under pressure to unveil some of their plans at the G20 summit in Mexico as the continent’s economic woes continue to drag on growth around the world.
The two-day meeting starts on Monday – a day after the Greek elections that could determine whether the country remains inside the 17 nation currency union.