German Chancellor sees European 'fiscal union'

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VOV News English - 74 month(s) ago 3 readings

German Chancellor sees European 'fiscal union'

Stock markets rallied after German Chancellor Angela Merkel called on December 2 for stricter fiscal rules for the 17-nation eurozone.

In a speech before the German parliament, Merkel warned it will take years before the struggling currency union gets back on its feet -- echoing similar remarks aired the day before by her French counterpart, Nicolas Sarkozy.

Speaking before the German parliament, Merkel said there are no simple or fast solutions for Europe's spreading sovereign debt and banking woes. But she also dismissed suggestions that Europe's leaders only have one last shot to fix the problems when they meet at a summit next week.

Merkel said the eurozone crisis was not just a state crisis but a crisis of trust, as investors shun the eurozone bond market, banks dump government debt, and doubts grow about the survival of the euro union.

Germany is the eurozone's most powerful member, and Merkel's speech was closely followed at home and abroad. The German chancellor holds talks on December 5 in Paris with President Nicolas Sarkozy of France - Europe's second-largest economy. The two leaders hope to cobble a joint rescue plan before European Union summit on December 8.

In a speech on December 1, Sarkozy also warned of a long, tough road ahead for the eurozone.

Sarkozy said France and Germany want a new eurozone pact and treaty reforms that demand more discipline, more solidarity and more responsibility toward Europe's citizens.

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