The 16-nation euro zone must be able to remove members who persistently break fiscal rules, German Chancellor Angela Merkel said Wednesday. She added that the Greek debt crisis, which has rattled the euro, should be dealt with at its "roots".
AFP - The 16-nation eurozone must have the option of removing one of its members from the club if a country persistently breaks its fiscal rules, German Chancellor Angela Merkel said Wednesday.
The option, which would be used only "as a last resort", should apply to countries which "again and again do not fulfil the conditions" to which euro area members are bound, she said in a speech to parliament.
The chancellor added that the current rules in the European Union's Stability and Growth Pact were no longer sufficient to deal with the current crisis, which she described as the euro's "greatest-ever challenge."
Nevertheless, she insisted that "no country should be left on its own" amid the crisis that has seen speculators attack debt-laden Greece and confidence in the euro shaken on the international financial markets.
She also said that "rapid support" for Greece was not the right answer and that the problem must be "attacked at the roots."
"A show of rapid support can not be the correct solution," she said. Instead, Greece must tackle its fiscal crisis on its own, which would get more to the heart of the problem.
"We should not offer premature aid, but get everything back in order. Anything else would be disastrous," said Merkel.
On Tuesday, European finance ministers backed measures Athens has taken to curb spending and raise taxes as it battles with a budget deficit over four times the maximum permitted by the Stability and Growth Pact.
Meeting in Brussels, the ministers also insisted that a contingency plan to save Greece from bankruptcy with emergency loans was only prudent foresight and unlikely to be enacted.
Date created : 2010-03-17