Merkel Says She Supports Two-Speed Europe, Political Union

German Chancellor Angela Merkel said she supports a two-speed European Union, with the faster group seeking deeper integration such as a fiscal union to complement monetary union.

“We need more Europe, we need not only a monetary union, but we also need a so-called fiscal union, in other words more joint budget policy,” Merkel said in an interview on ARD German public television broadcast today. “And we need most of all a political union, that means we need to gradually give competencies to Europe and give Europe control.”

Europe is already moving at different speeds, Merkel said, citing the Schengen agreement that abolished border controls between some European countries and the monetary union that excludes the U.K. and Denmark.

“This will be intensified,” she said. “Those in a monetary union will have to move closer together. We have to be open. We always have to make it possible for everyone” to join, “but we mustn’t stop because one or the other don’t want to come along just yet.”

Merkel said EU leaders at a meeting later this month will discuss a plan to transform the EU into a political union. Still, a breakthrough can’t be achieved at just one summit, she said.

Deficit reductions and steps to boost economic growth are “two sides of the same coin,” Merkel also said. While there can’t be growth without sound public finances, EU countries must also improve their competitiveness to such an extent that they can sell their products in global markets, Merkel said.

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