Sunday 22 October 2017

Europe facing toughest hour since World War Two -- Merkel

Noah Barkin and Stephen Brown in Leipzig, Germany

Warning that Europe is facing its "toughest hour since World War Two", German Chancellor Angela Merkel yesterday urged her party to set aside its misgivings about the euro and accept closer political integration as a solution to the bloc's deepening debt crisis.

In a one-hour address to thousands of delegates from her Christian Democrats Union (CDU) party, Ms Merkel offered no new ideas for resolving the crisis that has forced bailouts of Greece, Ireland and Portugal, and stirred doubts about the survival of the 13-year-old currency area.

But she said Germany, which as Europe's largest economy has provided the biggest share of the aid to stricken euro states, would have to make more sacrifices in the months ahead.

"The challenge of our generation is to finish what we started in Europe, and that is to bring about, step by step, a political union," Ms Merkel told the party congress in the east German city of Leipzig.

"Europe is in one of its toughest, perhaps the toughest hour since World War Two," she said.

Responsibility

And Germany would like to see Europe push through changes to its Lisbon Treaty by the end of 2012 that set the foundation for a common fiscal policy in the bloc, Finance Minister Wolfgang Schaeuble said yesterday.

"This is what we're aiming for," Mr Schaeuble said.

The party voted last night to allow euro states to quit the currency area. The resolution, which requires the assent of Merkel's two coalition partners before becoming policy, is part of Merkel's push for closer political ties and tighter budget rules in the European Union.

"We're not throwing anybody out," Mr Schaeuble said. "But if a country can't carry the burden or doesn't want to carry the burden, and the Greek people have to carry a heavy load, then we have to respect the country's decision."

The two-day party meeting was originally supposed to focus on education policy but Europe's debt crisis has dominated headlines for months and thrust itself into the centre of the debate. Last week alone, the leaders of Greece and Italy were forced out and replaced with technocratic governments charged with pushing through tough austerity measures.

Under former Chancellor Helmut Kohl, the CDU led Germany into the euro. Nearly 13 years on, some in the party believe the whole project was a mistake which must now be carefully undone, with Greece and possibly other countries exiting the bloc.

But Ms Merkel argued that Germany had a responsibility towards its partners and was vulnerable itself if other eurozone states were allowed to collapse, noting that 60pc of German exports go to the EU.

Meanwhile, Greece's new prime minister has said his interim government would focus on implementing a European debt rescue deal, warning that failure to do so could force the country out of the eurozone.

In his first parliamentary address since taking office at the head of a national unity government on Friday, Lucas Papademos said progress had been made on tackling Greece's debt crisis but more was needed to keep it in the Euro.

"The new government of cooperation and me personally, we undertake the responsibility at this critical moment because the country's participation of the eurozone is at stake," he said.

shift in power

Irish Independent

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