Differences emerge over eurozone debt crisis

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Differences emerge over eurozone debt crisis

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German Chancellor Angela Merkel and Italian leader Mario Monti say they are satisfied with the progress Italy has made in implementing reforms.

They emerged from talks in Berlin united on the importance of promoting growth. But on one key issue they appeared to differ.

Merkel made clear that the emergency fund created by euro member states – the European Stability Mechanism – cannot bypass the EU institutions and intervene directly to help countries in debt:

“I will once again quote the president of the European Central Bank Mario Draghi and this is also my conviction that a banking licence for the ESM is not compatible with EU treaties.”

But Monti said things could change in the future, including treaties. On the question of debt however, he said Italy had learned much from Germany:

“Europe itself offers each country and asks each country to have to have a long-term vision of the future. It’s no longer going to be possible for a single country to have deficits which eat away at the future, at the interest of future generations, like it was in the past”.

The talks were part of a round of shuttle diplomacy between European leaders in what is being seen by analysts as a crucial month in the two-and-a-half year debt crisis.

Next month Merkel visits Spain with speculation growing that the country will ask for a full bailout