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Merkel warns Europeans face long, hard ‘marathon’ to restore lost credibility

Friday, December 2nd 2011 - 22:12 UTC
Full article 2 comments
The ECB is different to the Federal Reserve, says the German Chancellor The ECB is different to the Federal Reserve, says the German Chancellor

German Chancellor Angela Merkel called for rapid EU treaty change to remedy the root causes of the Euro zone's debt crisis but warned that Europeans faced a long, hard “marathon” to restore lost credibility.

Outlining a long-term approach to tighter fiscal integration in the single currency area, with tougher budget discipline, she dismissed quick fixes such as massive Fed-style money printing by the European Central Bank or issuing joint Euro zone bonds.

“Resolving the sovereign debt crisis is a process, and this process will take years,” Merkel told parliament, vowing to defend the Euro, which she said was stronger than Germany's former deutschemark.

“The European Central Bank has a different task from that of the US Fed or the Bank of England,” the German leader said.

However, sources close to Merkel said she was willing to see the ECB step up its buying of troubled Euro zone countries' bonds as a bridging measure until budget controls took hold, but did not see it as a durable solution.

Speaking a week before a European Union summit seen as make-or-break for the 17-nation single currency area, Merkel ruled out issuing common Euro zone bonds, saying that would breach the German constitution.

Instead, she called for a mixture of greater European powers to control national budgets, to be enshrined in treaty changes, and smart use of the Euro zone rescue fund to stabilize markets.

Merkel's speech set the agenda for seven days of intense diplomacy to try to frame a new political deal to restore shattered market confidence and give the ECB grounds to act more decisively to defend the Euro.

Categories: Economy, Politics, International.

Top Comments

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  • ElaineB

    Yes, Frau Ditherer, you and your French counterpart should be locked in a room with nothing but bread and water until you reach agreement.

    Dec 03rd, 2011 - 09:10 am 0
  • Fido Dido

    No Elaine, she and her French counterpart should be locked in a room with NOTHING AT ALL. I wish/pray the Germans will just stand up and rise against those two. Oh lord, I really wish for that day, because all what those 2 are protecting are their bankster friends. If those 2 get what they want, Europe is finished, no matter what, because eventually the banks will fail, no matter what you do.

    Dec 03rd, 2011 - 05:24 pm 0
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