Angela Merkel said a core group of states needed to press on with European integration to fight the eurozone crisis, a rebuke to David Cameron, UK prime minister, who has called for more short-term crisis measures.
Germany’s chancellor said nations “in a currency union have to move closer together”, reinforcing the shift to “a multi-speed Europe” which began with the introduction of the single currency.
“We cannot just stop the process because one or other doesn’t want to join in yet,” Merkel said.
With Spain straining to recapitalise its banks and Greek reforms in doubt, Downing Street on Wednesday signalled that Mr Cameron would use his Berlin visit to urge Ms Merkel to take quick steps to pull the eurozone back from the brink of disaster.
The UK government has in recent weeks called for near-term measures including a bigger eurozone rescue fund to act as a firewall against financial market contagion, and jointly issued eurozone bonds – ideas which the German government has repeatedly rejected as unnecessary as it pushes for longer-term fiscal integration, CNN reported.
“We need more Europe. We don’t only need monetary union, we also need a so-called fiscal union. And most of all we need a political union — which means we need to gradually cede powers to Europe and give Europe control,” Merkel emphasized.
Cameron was asked whether a move towards closer integration within the eurozone of the kind which Mrs Merkel has advocated would trigger a referendum in the UK. He replied: “The British people have this guarantee – and it is now written into law by this Government – which is that if power is transferred from Westminster to Brussels then we hold a referendum.”
The Britith Prime Minsiter later commented on Merkel’s point of view saying: “I wouldn’t ask British taxpayers to stand behind the Greek or Spanish deposits. It is not our currency, so that would be inappropriate to do. I can understand why eurozone countries may want to look at elements of banking union. Because we are not in the single currency, we won’t take part in the profound elements of that banking union. I will make sure that Britain’s interests, particularly in the single market and the openness and fairness of the single market are protected.That is key for Britain,” his words was cited by The Daily Mail.
“It is not easy when you have got in the eurozone 17 countries, 17 governments and one currency, so I understand the difficulties,” he said adding that there is a need to solve the financial crisis, to recapitalise the banks, build the big firewall, get growth going in Europe through structural reform and make sure there are clear and credible plans to deal with deficits. “All of these things need to happen and Britain will keep pushing for them,” he emphasized.