BERLIN, Oct 18 (Reuters) - Germany's Angela Merkel called ahead of an EU summit for stronger central powers to intervene when member states break budget rules and rebuffed demands from Berlin's partners for the quick creation of a pan-European bank supervisor.
In a speech to the lower house of parliament hours before EU
leaders meet, the chancellor put herself on a collision course
with French Socialist President Francois Hollande and others,
who are reluctant to cede sovereignty over fiscal policy and
want the ECB to get new watchdog powers by year-end.
“We are of the opinion – and I speak for the whole German
government on this – that we could go a step further by giving
Europe real rights of intervention in national budgets,” she
said, voicing support for Finance Minister Wolfgang Schaeuble’s
idea of a European “currency commissioner”.
On banking supervision, she said quality must come before
speed, reiterating her view that rushing to meet a January 2013
target date for giving the European Central Bank (ECB) new
powers was a recipe for disaster.
Merkel also made clear that funnelling aid directly to
European banks from the bloc’s new rescue mechanism, the ESM,
could not happen until the new supervisory body was fully
operational.
“I want to be clear that completion of the legal process for
banking supervision is not enough in itself,” she said. “This
banking supervision must be able to work and act effectively.”
After her speech, in which Merkel reiterated her desire to
keep Greece in the euro zone, her main challenger in next year’s
German election, Social Democrat (SPD) Peer Steinbrueck,
launched a withering attack on her crisis management.
“It was a grave mistake that you allowed your coalition to
launch a bullying campaign against Greece’s membership in the
euro zone. You didn’t intervene, you didn’t speak out for Europe
and you vacillated,” he said, thumping his fist on the podium.
“Neither (former conservative chancellor) Helmut Kohl nor
any of your predecessors would have allowed a European neighbour
to be abused for domestic political purposes like that.”
Merkel stared glumly ahead and did not respond to the
feisty attack.
In her speech, she said that giving more powers over
national budgets to European authorities would require beefing
up the European Parliament to provide full democratic
legitimacy.
She said concerns about a “two-tier” Europe should not
prevent a discussion about limiting participation in debates on
euro zone issues to the 17 states in the currency, rather than
the full 27-member EU represented in the parliament.
Merkel also praised the efforts of struggling euro zone
states to cut debt and deficits and improve competitiveness and
said she had sensed a “strong desire for change” in Greece on
her recent visit to Athens.
But the chancellor said it was up to Spain to decide whether
it should seek further aid from the euro zone after agreeing on
a 100 billion euro programme to recapitalise its banks.
“It is Spain’s decision alone whether and how much aid it
needs on top of (the banking rescue) from the ESM,” she said.
