Merkel Says Euro Crisis Recovery Is Worth Austerity Pain

Chancellor Angela Merkel said the promise of lifting the euro area out of its debt crisis is worth the pain that’s being caused by German-inspired austerity.

Merkel cited progress in crisis management over the last 2 1/2 years and lauded European leaders for establishing fiscal rules and the foundation for a so-called banking union. Speaking to members of the foreign press today in Berlin, she added that “we’re not at the end of the road.”

“We still have a distance to go,” Merkel said. “Still, I’m convinced that our path has been the right one, even if it’s meant a huge challenge for many people in Europe -- the biggest and most difficult of those being youth unemployment.”

The German leader, asked whether she had dissuaded the Spanish government from seeking bailout assistance or if she’d pressed Italy’s Mario Monti to hold on to his premiership, said governments and leaders must make their own decisions.

“If somebody asks me for counsel in a friendly way and we discuss things, I don’t give recommendations, nor do I say what one shouldn’t do -- rather I give my assessment,” Merkel said. “A decision on who or what requests assistance or not is always a completely autonomous decision of each government.”

Rajoy Praised

Merkel lauded Spanish Prime Minister Mariano Rajoy for his efforts to control the country’s budget and shore up its banks and said efforts undertaken by European leaders had eased Spain’s burden, including on borrowing costs.

“I want Spain to have great success and I think especially since we’ve started the process of bank recapitalization, if you look at the interest rates, I think we’ve had success as far as Spain’s concerned,” Merkel said.

In a speech in Berlin later today, Merkel termed the EU a “unique project of civilization” that’s worth every effort to maintain.

“The EU is currently going through its biggest test” since its founding treaty of 1957, Merkel said.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE