Speaking a week before a European Union summit seen as make-or-break for the 17-nation single currency area, the German Chancellor Angela Merkel warned that Europeans faced a long, hard “marathon” to restore lost credibility.
“Resolving the sovereign debt crisis is a process and this process will take years,” Merkel said in an address to parliament.
Merkel spoke to the lower house of the German parliament, vowing to defend the euro, which she said was stronger than Germany’s former deutschemark. She called for a long-term approach to tighter fiscal integration in the euro zone but ruled out issuing common euro zone bonds as a crisis solution.
Merkel proposes to create new legislation by the EU to control national budgets, to be enshrined in treaty changes, and smart use of the euro zone rescue fund to stabilise markets.
On Monday, Merkel will meet with French President Nicolas Sarkozy in Paris to outline joint proposals for changes to the EU treaty to include stricter budget controls within each EU country, and to include automatic sanctions on countries who do not comply.
On the role of the European Central Bank, Merkel said:
“The role of the European Central Bank is different from that of the Fed in the United States of America and the Bank of England, for example.”
On the Euro and Germany Merkel commented the following:
“Despite all recent turbulence, the euro has proven itself. It is stable, it is more stable than the Deutsche mark was. As an export nation Germany benefits from the euro.
“The euro is much more than just a currency. With the economic and monetary union we have reached a new level of integration in Europe. The euro stands for the will of Europe to strengthen its internal development and jointly meet the challenges of today’s global times. The future of the euro is therefore inseparable from European unity.
“It is important to say that they (Germany’s proposals for the Dec. 9 summit) have nothing to do with some fears, concerns or accusations that one can read and hear at the moment that Germany wants to dominate Europe or something similar. That is far-fetched. We are advocating a certain culture of stability and growth. But we are doing this in the European spirit of Konrad Adenauer and Helmut Kohl. German and European unity are two sides of the same coin, we will never forget that.”
“The path ahead is still long and anything but easy. But I am convinced that it is the right path. It is the right path for us to reach our common goal, a strong Germany in a strong European Union for the benefit of the people in Germany and Europe.”