German Chancellor Angela Merkel urged European partners to tackle flaws in the eurozone by taking control of economic policy and making politically sensitive changes to EU treaties.
Speaking in the Bundestag lower house of parliament a day after her new “grand coalition” government was sworn in, Merkel said progress in countries like Ireland and Spain showed Europe was overcoming the financial crisis that nearly tore it apart.
“As pleasing as the progress towards greater stability and growth may be, we must also be clear that recovery is everything but already guaranteed, she said That means we need to eliminate the causes that have led to this situation in the European Union and eurozone through preventive policies.”
But she said it was too early to declare victory, describing the 17-member bloc that shares the euro currency as an unfinished project that could not afford to rest on its laurels.
“I know that pushing through treaty changes in the member states can be difficult, but if you want more Europe, you have to be prepared to develop it further,” Merkel added.
Germany wants closer coordination of economic policy to complement the bloc’s single monetary policy. At a summit in Brussels later this week, she will will push member states to agree binding contracts with the European Commission that would oblige them to take certain steps towards economic reform.
Meanwhile, France is one of a number of countries, including Italy and Spain, that are pressing Berlin for more “solidarity” in Europe to combat the economic distress, particularly in the bloc’s southern periphery, that has sent unemployment soaring.
“We have a situation in Europe where Germany is often accused of blocking certain things. This is not true,” Merkel said.
“If we got a real qualitative leap forward in terms of binding commitments … then we could also imagine that new ways are found to provide those countries that require additional help to reach their goals with that help.”
According to Merkel, the euroyone debt is crisis is not over. She praised Ireland and Spain though for their economic progress, and said there were signs of improvement in Greece, Portugal and Cyprus as well.
With a tough job ahead of her, Merkel will rely heavily on Finance Minister Wolfgang Schäuble, the most experienced member of the German cabinet, who has served as Merkel’s right-hand man in battling the eurozone crisis.