German Chancellor Angela Merkel said there’s no way around economic overhauls for euro-area countries struggling in the debt crisis and pledged to help them defend the joint currency.
Merkel said she will hold countries to commitments to make their economies more competitive and attract investors. “It’s arduous, but I see no other option that leads to a decent outcome,” she said in a speech to a regional convention of her Christian Democratic Union party today. “It isn’t some kind of pressure that were creating to make you suffer.”
While the euro area needs to regain the confidence of financial markets, Germany would bring on “the risk of a recession” if it refused financial aid to stem the crisis, she told delegates at Celle in the northern state of Lower Saxony.
Many investors “are betting that we won’t have the political strength” to defend the euro, she said. “I am determined to make the effort, even if it’s hard.”
“Trust means that everyone fulfills their commitments,” she said. “Trust is good, but verification is better. That’s what I’ll continue to fight for in Europe, every day.”
CDU-led Lower Saxony, home to companies such as Volkswagen AG and Continental AG, holds state elections on Jan. 20.