GERMAN CHANCELLOR Angela Merkel has said German solidarity with struggling euro zone partners goes without question, but comes at a price of “deeper political and economic integration”.
Ahead of today’s EU summit in Brussels, Dr Merkel reiterated her opposition to common “eurobonds”, warning that pooling risk violated the euro zone principle as a “community of responsibility”.
But opposition parties tore into the German leader in the Bundestag yesterday, accusing her of “piecemeal, duck and cover” crisis management that had unsettled Berlin’s EU partners and financial markets.
“We know that the euro is our collective destiny, and Europe is our collective future. Nobody in Europe will be abandoned,” said Dr Merkel. “But this is about a deeper political and, relating to the euro zone, economic integration. We will talk more about closer integration in the coming months but we will not make the mistake of pooling risk, which would happen eurobonds. It is not a solution, the solution lies in greater harmony and competitiveness in the euro zone.”
She told deputies that, from a German perspective, solidarity goes hand in hand with austerity measures to improve competitiveness and national budgets.
Only then could the “grandiose idea of peace and freedom of the European union” be preserved for future generations. “This is the legacy to which I feel personally committed,” she said.
Opposition leader Frank Walter Steinmeier launched a ferocious attack on Dr Merkel and her “curiously vague” speech filled with “nothing more than hope and whistling in the dark”.
“Ducking away from problems is a deplorable swansong for the kind of European politics we have followed in the last decades,” he said.
“We won’t solve these problems with small, technical measures, we need a clear signal of European solidarity.”
Mr Steinmeier said Germany’s European partners are calling for leadership and a plan for closer economic and political union.
“It’s about tackling the debate where it is most blocked, particularly at a fiscal integration,” he said.
“It not good enough that countries like Ireland that lived beyond their means for years at the expense of others are blocking this.”
Mr Steinmeier, together with former finance minister Peer Steinbrück, presented a euro zone rescue plan yesterday combining a limited form of eurobonds, with debt guarantees and “intelligent haircuts” for investors in Greece, Portugal and Ireland.
Their proposals, made in a Financial Times article, foresee an enhanced euro zone rescue fund and pooled bond sales “in the medium term” in exchange for closer budgetary co-operation.
“Eurobonds will succeed only if complemented by new, far-reaching political reforms,” wrote the two politicians, ministers in Dr Merkel’s first, grand coalition administration.
“This means empowering European institutions to establish tighter controls over fiscal and economic stability, alongside common minimum standards on wage and welfare policies as well as capital and corporate taxation.”
Ahead of today’s summit, Luxembourg’s foreign minister, Jean Asselborn, called for “clear and unambiguous decisions” and warned Berlin and Paris not to “patronise” their EU partners.