Nov. 16 (Bloomberg) -- Chancellor Angela Merkel said that Germany is ready to cede some sovereignty to strengthen the euro area and restore confidence in the common currency.
European Union treaty changes to strengthen EU institutions and patrol tighter budget rules are needed “to make the euro zone more crisis-proof,” Merkel told reporters in Berlin today at a joint briefing with Irish Prime Minister Enda Kenny.
“Germany sees the need in this context to show the markets and the world public that the euro will remain together, that the euro must be defended, but also that we are prepared to give up a little bit of national sovereignty,” Merkel said. Germany wants a strong EU and a euro “of 17 member states that is just as strong and inspires confidence on international markets.”
Germany, the largest contributor to euro-area bailouts, is ruffling feathers with its plans for an overhaul of the EU’s guiding rules. U.K. Prime Minister David Cameron rebuffed Merkel’s proposal for treaty change, saying Nov. 14 that the crisis offers the opportunity to allow powers to “ebb back” to national states from Brussels.
Merkel explained that treaty change would mean “an intervention and oversight role in respect of the preparation of national budgets, but with flexibility to certain countries to do their own particularly budgetary strategy,” Kenny said.
“We have an absolute interest in the continued strength of the European Union and the stability of the euro zone and the euro,” Kenny said. Even so, “any steps toward major treaty changes would be very challenging,” he said. “We had a frank conversation about that.”
Merkel said that the existing treaties mean that the European Central Bank “doesn’t have the possibility of solving the euro problem.”
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