Merkel calls for two-speed EU with an increase in fiscal and political union
GERMAN Chancellor Angela Merkel said she supports a two-speed European Union, with the faster group seeking deeper integration such as a fiscal union to complement monetary union.
"We need more Europe, we need not only a monetary union, but we also need a so-called fiscal union, in other words more joint budget policy," Ms Merkel said in a television interview. "We need most of all a political union, that means we need to gradually give competencies to Europe and give Europe control," she added.
The chancellor said she wants an EU summit later this month to propose a framework for forging a stronger political union. Europe could spur growth to help governments pay down their massive debts and reduce public deficits.
"We must, in each European country, confront our respective weaknesses," Ms Merkel said.
Speaking later at a podium discussion with students in Berlin, alongside British Prime Minister David Cameron and Norway's Prime Minister Jens Stoltenberg, she reiterated that there was no such thing as a magic solution to the euro crisis.
"Calling for this one big bold stroke and then the euro crisis will be gone. This won't work," she insisted.
"These problems have piled up over many years and now it will take some while to render this system fit for the future," she said.
Europe is already moving at different speeds, Ms Merkel added, citing the Schengen agreement that abolished border controls between some European countries and the monetary union that excludes the UK and Denmark.
"Those in a monetary union will have to move closer together. We have to be open. We always have to make it possible for everyone" to join, "but we mustn't stop because one or the other don't want to come along just yet."
Mr Cameron called on Europe to come up with an "immediate plan" to resolve the eurozone crisis.