Tags: euro | coordination | Germany | survive

Merkel Says Euro Needs Closer Economic Coordination to Survive

Thursday, 16 May 2013 11:55 AM

German Chancellor Angela Merkel said that the euro risks falling apart unless European Union nations cede some sovereignty and work toward closer economic and budgetary cooperation.

“We have to talk about how we coordinate our national economic policies, how much do we invest, what are our labor costs and many other things that also have to be coordinated” among EU countries, Merkel said during a WDR television panel discussion on Europe in Berlin. “Otherwise, a joint currency can’t exist.”

Merkel cited the example of one country spending the equivalent of 3.5 percent of gross domestic product on research and another 0.1 percent, saying that if “this goes on over a period over 20 years, there will be such tension within the currency that we won’t be able to keep it together.”

The answer is “more coordination, not just on fiscal policy but on economic policy as well,” she said.

The comments are the strongest yet by Merkel, the key political policymaker during more than three years of the euro-area debt crisis, spurring Germany’s European partners to bolster their competitiveness through reforms and emulating the most successful economies.

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German Chancellor Angela Merkel said that the euro risks falling apart unless European Union nations cede some sovereignty and work toward closer economic and budgetary cooperation.
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2013-55-16
Thursday, 16 May 2013 11:55 AM
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