Wednesday, 14 December 2011

German Chancellor Merkel says Britain a key EU partner

Chancellor Angela Merkel has told German MPs that the UK will remain a strong EU partner, despite its decision not to sign up to an EU summit deal.
Addressing the Bundestag (parliament), she said she very much regretted that UK PM David Cameron had been "unable to join us" on the path to fiscal union.
Last week 26 of the 27 members of the European Union backed new fiscal rules, with only the UK abstaining.
Britain said the deal failed to provide safeguards for the City of London.
Mrs Merkel was speaking after the euro fell below $1.30 and £0.84 - an 11-month low - amid continuing fears over the eurozone's future.
The deal was prompted by debt crises in Greece, Italy and several other eurozone countries, and is intended to tighten rules to prevent member states running up further debts in future.
'Intermediate contract'

Franco-German proposals

  • Automatic sanctions for any state which runs up a deficit of more than 3% of GDP
  • "Golden rule" built into eurozone members' budgets against running a deficit
  • Private investors never again to be asked to take losses, as in Greece
  • European Stability Mechanism (ESM) brought forward from 2013 to 2012, with decisions based on a qualified majority not unanimity
  • Eurozone leaders to meet every month as long as crisis continues to discuss growth
The BBC's Stephen Evans in Berlin says the chancellor gave few details that might satisfy the financial markets in the immediate crisis, but she indicated that the close integration of a core of the EU was now her strong aim.
The chancellor said the countries had decided to have an "intermediate contract".
"I am convinced that if we have the necessary patience and endurance, if we do not let reversals get us down, if we consistently move towards a fiscal and stability union, if we actually complete the economic and currency union... then what I have always stated as our goal since the beginning of the crisis will come to pass," she said.
There would be automatic penalties on countries that broke spending rules, she said, adding that the EU had to tackle the task of harmonising legislations of different countries more closely.
"I regret that the UK has not been able to join us on this journey," she said.
"But I also believe it's an important partner in the European Union... Great Britain has its own vital interest that the eurozone will overcome its own financial crisis."
She said a stronger and more stable Europe would emerge from the crisis.

taken from

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