Germany's Chancellor Merkel urges EU political union


German Chancellor Angela Merkel: "We want to build on what we have achieved together"

German Chancellor Angela Merkel says the EU needs a political union even if it means some countries integrating faster than others.

Speaking on German TV, she called for "more Europe", including a budgetary union, saying "we need a political union first and foremost".

"Step by step we must from now on give up more competences to Europe, and allow Europe more powers of control."

However, she has resisted calls for the joint issuing of eurozone debt.

She will hold talks on Thursday with UK Prime Minister David Cameron, who has urged the 17-nation eurozone to speed up measures to build a budgetary union to shore up the embattled monetary union.

Ms Merkel's insistence on economic austerity and budget discipline has alienated many Europeans who say the policy is strangling growth and piling more debts on the struggling "periphery" countries like Greece and Spain.

Spain has to find at least 80bn euros (£65bn) to shore up its banks, which are struggling because of bad property loans.

Spain's finance minister has said the credit markets are "effectively shut" to his country, but so far Madrid has avoided asking the EU for a bailout.

On Wednesday the European Commission set out plans for a eurozone "bank union", which could make it easier for troubled eurozone banks to access EU credit.

In her TV interview Ms Merkel reiterated that "budget consolidation and growth are two sides of the same coin".

"Without solid finances, there is no growth, but solid finances alone are not enough; there are other points - above all, questions of competitiveness," she said.

Ms Merkel remains very cautious about the idea of pooling eurozone debts in "eurobonds", despite growing calls - including from the European Commission - for the eurozone to launch them.

Treaty restriction

Germany, as the strongest EU economy, wants to avoid a situation where it would end up shouldering the debt burden of weaker EU countries.

Direct bailouts of eurozone economies by the European Central Bank are banned under the "no bailout" clause in the Maastricht Treaty, which launched the single currency.

But next month the eurozone will have a new 500bn-euro rescue fund, the European Stability Mechanism (ESM), which should make it easier for countries in trouble to access credit.

UK Chancellor of the Exchequer George Osborne on Thursday ruled out British participation in an EU banking union, in a BBC interview.

"We need to make sure that the mechanisms already put in place can be activated", he said.

"The banks have been one of the weak links in all of this and the eurozone have tolerated weak, undercapitalised banks for too long."

Former UK foreign secretary Lord Owen told the BBC that, being outside the eurozone, the UK ought to remain part of a single market and let other countries develop a closer political union if they so wished.

Echoing the idea of a twin-track Europe, he said the European Union could be "the strongly integrated element" and the original European Community, which preceded the euro, could be the wider grouping for the single market. He said the UK would need a referendum to decide on its future in Europe.


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  • rate this

    Comment number 163.

    Get out now, dont be fooled by the French and Germans. The Union is only good for them, and was only set up as a short term measure, after the last war. We are and always have paid in to much, to keep France and Germany afloat. We got rid of Hitler, and to some extent Stalin. Now go all the way and get rid of the EU!

  • rate this

    Comment number 162.

    Luckily for me, a client spurred me into a thorough re-examination of 20th c. European history. More than ever, I am convinced the great answer to most political & socioec+env+ed dilemmas is Care-Full, Peaceful Interlinkage of Europeans possibly with time to include even Turks&Ukr. (RF messy for a while yet!) National identity & Sovereignty can stay, also key assets: Armed Forces, Law, Faith, Lang

  • rate this

    Comment number 161.

    Ever wondered why the BNP cornered the Union Flag as their own.
    Its because they love this country.

    Lib Dims want an integrated Europe
    Labour party will go where-ever the unions tell them to
    Tories want to be at the heart of Europe.
    My point is.
    Is that what the people want?
    That is why we will never be given a referendum on our continued membership of the EU

  • rate this

    Comment number 160.

    Next month EZ will have new 500B-euro rescue fund (ESM), which should make it credit easier. Osborne ruled out British participation in an EU banking union, saying UK needed to make sure mechanisms already put in place can be activated. What mechanisms?
    There's somewhat of a puzzle here. What are Cameron & Osborne referring to specifically: safeguards, mechanisms - what's up?

  • rate this

    Comment number 159.

    Damn sure europe was one of the topics discussed at the BILDERBERG meeting at Chantilly,Virginia.

    Merkle was seen there, I wonder what delights that little nest of vipers have in store for us over the next 12 months?

    And with the usual media black-out, one can only expect more of the same 'tax us til we bleed' instructions given to our unelected european masters by their unelected bosses..

  • rate this

    Comment number 158.

    140 - "When the dust settles after it's inevitable collapse, just take note who is left with OUR money..."

    The very same people who have been stealing it from your pension and savings to prop up their lifestyles. The bankers and the politicians are not different people.

    It will be bankers who take this country over and happily sell your kids into serfdom not Eurocrats.

  • rate this

    Comment number 157.

    146. val1149

    Yes but in order to achieve this, they were the first to break their own rules about deficit and the rest of Europe followed, effectively voiding the same policies they are trying to impose to everyone else. And to add to that, almost all of the high profile corruption cases in Greece involved German companies bribing the same parties that now form the 'pro-austerity' bloc!

  • rate this

    Comment number 156.

    It seems Merkel is calling for a european Big Brother. The question is who gets to be Big Brother? Guess.

  • rate this

    Comment number 155.

    I do not think you need to worry about the UK`s freedom. I am not even sure why the UK is in the EU. You have joined a union but chose to opt out of some of the most basic fundamental integration proposals. The EU needs every bit of dedication right now in order to avoid a total collapse, so please do not hinder the efforts of those willing to save the union.

  • rate this

    Comment number 154.

    #137 recessionn usually follow about 2 years after the policy effects have been in place. Coalition has only been in 2 years. The current problems were made in the 97--2010 period. We have been bumblin along for the last 2 years. Recession 1 we lost about 8% of GDP so far wit hthis Recession 2 we have lost about 0.6% of GDP . And that with £250billion+ QE and doubling of the national debt.B4 2010

  • rate this

    Comment number 153.

    EU, EZ here to stay. Let's hope Greece stays, too. If not, so be it. Problems can be fixed. Time heals all wounds: Europe's history, after all, goes back to Roman Empire. We can do this. Step by step approach best, making sure of strength, commitment & -- crucially -- integrity -- of all participants at each step. Technology & Transparency work together to enable Novel Ways & Methods goingforward.

  • rate this

    Comment number 152.

    The very last thing that Europe needs is a political union. If these people had any sense at all, they'd dissolve the Eurozone and each country would go back to using it's own currency and quit saying Yes to the bureaucrats in Washington D.C. What is this Angie Merkel thinking anyway?

  • rate this

    Comment number 151.

    HA! They should of thought of that before introducing the Mickey Mouse.
    But even if their was political union, will they let the people vote on it? will they tell them the full implication of political union? Would the Germans like being told what to do by the Lithuanians/Romanians I wouldnt.
    Its bad enough being told what fish we can catch by landlocked countries.
    Its a NO-GO

  • rate this

    Comment number 150.

    I really wonder why so many posters are so afraid of a federal Europe. It's not like national govts are going to disappear if it happens. Federal Germany is very democratic. Australia, US, Canada and other federal setups all get along fine. Even the UK is a federal setup of sorts. And as for this who won the war nonsense, get over it. The UK is actually the least democratic nation in the EU.

  • rate this

    Comment number 149.

    Merkel will hold talks Thurs with Cameron, who has urged 17-nation EZ to speed up measures to build a budgetary union to shore up embattled monetary union. What is Cameron's interest? Why are Merkel & Cameron consulting? Already on Wed, EU Commission had set out plans for EZ "bank union" - easier for troubled EZ banks to access EU credit. What point, after the fact, was Cameron trying to make?

  • rate this

    Comment number 148.

    @142. MGary
    Speak for your own country mate. Prety much everyone in Greece has seen what a dissaster Merkel's policy has been and I honestly hope you never see it in your country.

  • rate this

    Comment number 147.

    no 144 the reason india china and other eastern nation are economic powerhouses is because of cheap labour. to put it simply population=power.

  • rate this

    Comment number 146.

    I do wish contributors would move on from the image of the Germany of 1945. The current Germany is light years away from that. It is now a peace-loving, successful, democratic and open country that should be the envy of us all. The fact that they have benefitted from a co-operative and disciplined approach to running their economy should be something we should be trying to emulate, not denigrate.

  • rate this

    Comment number 145.

    However they dress it up the Eurozone (and Euro) are in a right mess.

    They won't admit this, because people in general are not good at standing up and saying "we messed up big time and it's going to hurt you".

    Asking a politician to come clean is like expecting the tide to stop when you tell it to. Aint gonna happen. As for the unelected cabal of technocrats that is the European Commission...

  • rate this

    Comment number 144.

    400 years ago poor British peasants made the trip to the New World to find a better life. Now their decedents are some of the richest in the world. 200 years ago the tribes of India were forcibly united under British rule, and are now an industrial powerhouse much stronger than we are. Between 1500 and 300 years ago Briton herself has gone from petty warring clans to a mighty civilisation. Unity.


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