German Chancellor Angela Merkel proposed a new European aid fundto bolster competitiveness as she highlighted disagreements overbudget rules, joint borrowing and bank supervision in a pre-summitaddress.

Speaking to lawmakers in Berlin before heading to Brussels for atwo-day gathering of European Union leaders, Merkel laid out hervision for more economic coordination, while expressing “surprise”at negative reaction to a proposal for a watchdog with veto powerover national budgets. Her vision includes a fund “limited in timeand project-based” and possibly stocked by the proposed financialtransaction tax, she said.

“To give all member states the opportunity then to improve theircompetitiveness and to actually be able to implement thesecommitments, I propose that we introduce a new element ofsolidarity,” Merkel said in her speech at the Reichstag parliamentbuilding. “Yes, we need solidarity, but we need a form ofsolidarity that leads to what we need: more competitiveness.”