German Chancellor Angela Merkel said on Wednesday the euro zone’s top priority for the beginning of 2012 was to secure a second aid package for Greece, while she expressed admiration for how quickly Italy’s new government has launched reforms.
Merkel said after talks with Italian Prime Minister Mario Monti in Berlin that the Greek package had to be resolved before Europe could start working out how to boost growth and jobs.
“The euro zone’s first obligation this year is to resolve a second Greek programme and finalise these negotiations with the banks so that we can then concentrate on structural problems in the euro zone,» Merkel told a news conference.
She also said Germany would be prepared if necessary to pay more capital up front into the euro zone’s permanent bailout
mechanism, the ESM, which is due to come on stream in the middle of the year. The statement helped the euro claw back some losses and German Bund futures retreat from the day’s highs.
“The Merkel comments about Germany being ready to put more money into the ESM … seem like a change of tack. It seems a more proactive approach to the crisis,» a bond trader said.