BUSINESS

Merkel cautions against ‘deceptive calm’ as crisis risk remains

German Chancellor Angela Merkel called for a fresh push to create “real economic union” through changes to European treaties, saying that the euro-area debt crisis isn’t yet defeated.

Addressing lawmakers in Berlin on Wednesday in her first policy speech of the year, Merkel said that Europe risks falling behind unless the 18-nation euro region expands binding commitments and improves its current “unsatisfactory” coordination on economic policy.

“Without decisive progress on this front, without a quantum leap, we won’t overcome the European sovereign-debt crisis,” Merkel said. “We might learn to live with it somehow, but we won’t keep our place at the top of global development.”

Merkel, who won re-election in September, cited her drive to balance the budget in 2015 and Germany’s so-called social- market economy as models for Europe as she set the tone for her third-term coalition with the Social Democratic Party as junior partner. She sat rather than stood at the lectern because of a ski injury sustained in December.

“It has to be Europe’s aim to emerge from the crisis stronger than it went in,” Merkel said. “Because that is so, we can’t trust the deceptive calm we’re seeing right now” in the euro area. The currency union must be deepened “and I’m convinced that this requires further development of the EU’s treaties,” she said.

“Solid” finances, investment in infrastructure, securing the shift to renewables, strengthening social cohesion and Germany’s responsibility to Europe and the world will be the main themes of her new term, Merkel told lawmakers.

[Bloomberg]

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