Merkel Attacks Markets in Call for Voter Support to Cut Debt

Merkel Attacks Markets in Call for Voter Support to Cut Debt
German Chancellor Angela Merkel. Photographer: Lennart Preiss/AP Photo

German Chancellor Angela Merkel renewed her attack on markets for their role in stoking Europe’s financial crisis, saying the challenge for policy makers is to woo voters to support cutting debt levels to escape the sights of investors.

Merkel made her comments at an event in the Bavarian town of Abensberg today after her finance minister, Wolfgang Schaeuble, warned against heaping “false expectations” on the European Central Bank to end the debt crisis, now almost three years old.

Merkel, speaking at an event organised by the Bavarian Christian Social Union party, said that in the last five years, markets “haven’t served the people,” allowing a few to get rich at the expense of the many. Markets can’t be allowed to destroy the fruits of people’s labor and governments can’t be put at their mercy through excess debt, she said.

“The real question about our democracy is: Can we in Germany and in Europe win elections when we jointly stand up for solid finances, when we don’t always spend more than we take in?” Merkel said in a beer tent packed with local party officials dressed in traditional Bavarian lederhosen and dirndls.

Merkel’s comments are the most explicit yet on her campaign themes for federal elections in the fall of 2013, to be held at the same time as a Bavarian regional vote that will determine the CSU’s fate. Sharing the podium with the party’s general secretary, Alexander Dobrindt, Merkel’s tone contrasted with his warning last month that Greece would no longer be in the euro region in 2013.

Effort Required

The chancellor reiterated that Greece must fulfil the terms of its bailouts in return for “solidarity,” while those programs undertaken in Spain and Portugal “require an effort.”

“We have to press for reforms in other countries even if they sometimes say we’re hard-line,” Merkel said. “It’s not enough just to keep muddling though. But I also say that in such a difficult phase these countries deserve our solidarity and that we root for them to overcome their difficulties.”

The CSU, which is the Bavarian sister party to Merkel’s Christian Democratic Union, has in recent weeks stepped up its anti-Greek rhetoric and criticized the European Union, while Merkel has insisted she wants the country at the origin of the debt crisis to remain in the 17-nation currency union.

“We need Europe, but we need a Europe that’s strong in the world,” said Merkel, who is due to host EU President Herman Van Rompuy for talks in Berlin tomorrow. Europe has to reform to become strong, with an end to the “debt union” as its leitmotiv and Germany leading from the front.

“We can’t sit still,” said Merkel. “We can’t take up so much debt that tomorrow we won’t have anything left and we’ll be at the mercy of the financial markets.”

Merkel has previously criticized the power of financial markets, saying that the primacy of politics must be preserved.

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