Brussels, 17/12/2010 (Agence Europe) - Addressing the press after the meeting, Angela Merkel sought to be reassuring saying they would do everything necessary to ensure eurozone stability. The euro is part of Europe, she stressed. With the creation of the permanent crisis-management mechanism, reform of the Stability and Growth Pact, and the many reforms initiated in many member states, “we have already achieved a great deal” towards stabilising the single currency, she said. This course of action must be followed and there must be a “culture of stability” throughout Europe without, however, neglecting economic growth, she said. In 2011, she added, coherence of economic policies with member states must be enhanced. Questions were raised such as: But how far will this enhanced coordination go? Will it also imply harmonisation of salary policies and social protection systems? In her response, Merkel said it was too soon to say as they had not discussed details but that it was clear that this can affect “all political areas”.
She was asked whether 2011 would be better for the euro than 2010 or if she feared the crisis would spread to countries like Spain and Portugal, and replied that she could not make any predictions but was impressed by the measures taken by Spain and Portugal and 2011 would be a year of reform.
On the permanent eurozone crisis management mechanism, Angela Merkel highlighted that very strict conditions would be attached to use of the mechanism because the stability of the eurozone as a whole would need to be under threat (rather than a single country), decisions to use the mechanism would need to be taken unanimously and private creditors would always have to be involved in the restructuring of a bankrupt eurozone country's debt. She said that private creditors would not come on board until the summer of 2013, when the new permanent system will replace the current temporary set-up. She said today's decision would not change the current system in any way because it did not cover current loans. Asked how much cash would be available under the new mechanism in 2013, she said this was not yet clear but it would need to be a “convincing” amount that was “large enough to ensure stability of the euro”. The amount would also depend on the scale of reform and future coordination of economic policies. The more coherent that economic policies are and the more anchored the culture of stability in Europe, the less money would need to be in the permanent mechanism, she explained.
Angela Merkel said that Germany backed the idea of the British prime minster, David Cameron, for a freeze on the EU's budget until 2020 (see related article). She said she supported the policy of extending any increase in the EU's budget by no more than 1% of GDP. (H.B./transl.fl)