Thursday, June 14, 2012

Angela Merkel: Germany cannot save the euro on its own

Germany cannot save the euro single-handedly, Angela Merkel has warned, expressing her growing anger over British, American and G20 demands that she does more to tackle the eurozone debt crisis.

The German Chancellor is furious that France and Italy, countries that she regards as shirking their responsibility to cut their high levels of national debt, has rallied the G20 behind their calls for eurobonds and EU-funded bank rescues.

"All eyes are on Germany," she told German MPs on Thursday. "But we also know that Germany's power is not infinite. So our responsibility as Europe's largest economy is to deploy our strength credibly."

Chancellor Merkel has expressed her fury at suggestions, backed by Britain and America, that trillions of euros in debts run up by France, Italy and Spain should be shared across the eurozone as eurobonds, with Germany picking up most of the bill as the EU's largest and most successful economy.

She is also incensed that France, which blocked German proposals to increase EU powers over national borrowing levels, is pushing hard, with Italy and the G20's support, for the eurozone to rescue French and Italian banks without the cheap, subsidised EU loans appearing on their budget balance sheets.

Mrs Merkel told her MPs that she would refuse the demands and tell the G20 at a meeting in Mexico next Monday that Germany would not take on the "Herculean task" unless there was a global effort. Read More