Merkel Says $945 Billion EU Rescue Deal Only Bought Some Time for the Euro

German Chancellor Angela Merkel said that the European Union’s 750 billion-euro ($945 billion) rescue package for the euro is only buying time for governments to cut budget deficits.

“A policy of saving, scaling back deficits that have risen very sharply -- that’s the task we have to accomplish now,” Merkel said in an interview with RTL television today in Berlin, citing the call for cutting deficits endorsed by her and other Group of 20 leaders at their meeting in Toronto last week.

“This work has to be done by all countries over several years, coupled with structural reforms, so we can say in the end that the euro is stable and sustainably secured,” even when “rescue umbrellas” aren’t in place, Merkel said.

Germany will push for a Europe-wide tax on financial transactions after the G-20 rebuffed her call for a global approach, Merkel said. “We’ll have to discuss this.”

Asked whether such a tax might hurt the competitiveness of European financial companies, Merkel said it can be done in “a balanced way.”

To contact the reporter on this story: Tony Czuczka in Berlin at aczuczka@bloomberg.net

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