said euro nations must follow Germany’s lead in tightening budgets and reshaping labor markets to return to growth as she seeks to stave off any crisis eruptions before elections in September.
As European leaders struggle to stanch recession and unemployment, Merkel lauded Germany’s efforts to keep its economy stable through the crisis and said the euro area’s 17 member states must stick to a recipe of budget discipline and improving competitiveness so that growth can take hold.
It’s greatly in Germany’s interest to do everything so that structural reforms and budget discipline can take place in other countries,” Merkel said in her weekly podcast.
Even as French President Francois Hollande restated his declaration that the three-year-old crisis is over, a looming risk of Greek debt writedowns and a scourge of joblessness among Europe’s youth could compound the turmoil as EU leaders prepare for a June 27 summit. Merkel is easing into an election campaign to seek a third term as chancellor in a Sept. 22 vote.
Hollande, on a two-day trip to Japan, reiterated that the acute phase of the crisis is over and that the euro leaders’ primary task consists of growth and employment.
Jobless Discussions
Finance and labor ministers from Spain, Germany, Italy and France are scheduled to meet on June 14 in Rome to hammer out a European plan to directly address the 24 percent youth-unemployment rate. Merkel and Hollande met at the end of last month to discuss the issue, announcing an initial 6 billion euros ($7.9 billion) to fight joblessness.
European leaders won more potential reprieve after European Central Bank President Mario Draghi last week said the euro economy will return to growth by the end of the year. The single currency climbed 1.7 percent last week against the dollar, rising to its highest level since February.
Still, prospects for growth could be offset by new concern over Greek debt. The International Monetary Fund is pressuring Europe to agree on an additional debt writedown this year to address a 4.6 billion-euro debt shortfall for 2014, Der Spiegel reported, without saying where it obtained the information.
Managing Director Christine Lagarde has said the IMF won’t participate in funding unless it’s secured for the next 12 months, the German magazine reported.
