In a speech to the lower house of the German parliament German Chancellor Angela Merkel announced today that European Union leaders are ready to approve a plan to create a permanent rescue shield for the euro zone when they meet in Brussels later this week.
Merkel said the bloc's leaders would back a deal struck last month by EU finance ministers, who agreed to create the European Stabilisation Mechanism (ESM) that is intended to replace a temporary mechanism from mid-2013.
Merkel stressed Berlin's commitment to help its European partners but again rejected the idea of issuing joint euro bonds. "We know that the euro is our collective destiny, and Europe is our collective future," Merkel said. "Nobody in Europe will be abandoned. Europe will succeed together." However, for the European project to work, countries needed to pull in the same direction, she added. "This is about deeper political integration, and in relation to the euro, above all deeper integration on economic policy," Merkel said. "That's why it's so important that we speak about further political integration over the next few months."
To underpin the new mechanism, Germany has pressed for small changes to the EU's treaty, which Merkel said she hoped would be formally signed off by the bloc's leaders in March. These should then be ratified across the EU by 2012 in order to dispel any doubts that a permanent mechanism would be in place the following year, Merkel said.
EU-Digest
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