German Chancellor Angela Merkel once again rejected the idea of jointly-issued eurozone bonds, saying on Wednesday they would not help at all in the current crisis. Merkel said that such bonds - advocated by some of her European partners and by financial markets - offer no incentive for budget consolidation and reforms.
She renewed a demand for the introduction of a German-style 'debt brake' on government borrowing in other eurozone countries and called for sanctions on countries that misuse structural funds. She said some eurozone countries would have to introduce further painful reforms which cannot be delayed, and that none should take unilateral steps.
"I reject euro bonds because they are not a solution for this crisis," said Merkel, in a speech in the eastern city of Magdeburg which awarded her its "Kaiser Otto" prize for her efforts to further European integration and stability in the European Union. She added the collectivisation of bonds would counteract any incentive to reduce debts and to take reform measures.
"It is politically irresponsible to succumb to the longings for a quick fix," Merkel said. She reaffirmed the need for a tough stance on countries that violate deficit rules. "I want Europe to become a 'stability union'," she said, adding Germany would remain an anchor of stability for Europe. Merkel also renewed her view that the euro and the European Union are indivisible.
"If the euro were to fail, the entire European project would be at risk," she said, adding the euro had proven itself to be a strong and stable currency. Merkel said that some are now asking whether countries such as Greece would be better off with the drachma again and even if Germany would be better off returning to the mark. Some were asking whether Europeans were prepared to continue the joint project, the euro. "I'm in favour of us daring exactly that," she said. "It's still correct to say what we said in 2007: in Europe we're condemned to our good fortune."
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