Germany will confront an increasingly united bloc of euro-area nations demanding more ambitious policies to fight the financial crisis this week, as European leaders prepare for a summit setting the course for their currency’s preservation or ultimate demise.
As concern mounts over their banking systems and finances, Spanish and Italian leaders have added their voices to those calling for more decisive action, a counterpoint to Germany’s more incremental approach to solving the 2 1/2-year-old crisis. European Union leaders will attend pre-summit meetings as they work to narrow differences before the June 28-29 gathering in Brussels.
German taxpayers couldn’t back channeling funds directly to banks in other countries because they have no oversight of how the money would be used, Merkel told reporters in Rome. As chancellor, she only had such powers over German banks. “You would have a huge problem here,” she said. Merkel travels to Paris on June 27 for a pre-summit meeting with Hollande, while ECB President Mario Draghi and Bank of France Governor Christian Noyer meet the French president today.
The federal government, facing pressure from the 16 states over tighter EU budget rules that risked worsening a deficit squeeze, unexpectedly backed a form of shared liability to help the states meet constitutional budget limits. The two layers of government plan their first joint debt sale in 2013, the government press office said in an e-mailed statement. The decision doesn’t mean Germany is ready to assume similar liability for the euro zone, Finance Minister Wolfgang Schaeuble said yesterday.
More Germans would favor leaving the euro area than those in France, Italy and Spain, according to a poll published in four European newspapers yesterday. Some 39 percent of Germans would back such a move, compared with 28 percent of Italians, 26 percent of French voters and 24 percent of Spaniards, according to the Ifop-Fiducial survey.