Merkel says investor-funded crisis mechanism to strengthen euro
German Chancellor Angela Merkel said that European Union leaders will discuss a nine-point plan to backstop indebted countries that would strengthen the euro area in the long term by making investors help pay for future crises.
The EU, European Central Bank and International Monetary Fund will patrol the debt risk of euro-area countries under a planned permanent crisis-resolution system that will require “limited” changes to EU treaties and kick in from 2013, Merkel said in a speech to parliament in Berlin today, outlining her aims for an EU summit in Brussels beginning tomorrow.
“Strict conditions” will be tied to aid for distressed countries, and a system of “collective action clauses” will ensure that investors contribute in specific circumstances to be determined in each case, she told lower-house lawmakers.
“For me it’s important that financial aid will, also in the future, be granted only as a last resort,” Merkel said.
“We will gain more stability, and this gives us more security for the future,” she said. “The euro is our common fate and Europe is our common future.”