Chancellor Angela Merkel of Germany raised the prospect of a new European aid fund that would be used to help struggling eurozone countries finance projects to improve their fiscal well-being and make them more competitive. She also suggested that the money to finance the fund could be found in the proceeds of a financial transaction tax already approved by 11 member states.
Bloomberg reported Thursday that Merkel (left) spoke to German lawmakers before leaving for a two-day European Union leader summit meeting, and raised the prospect of the tax-funded aid in place of sharing debt obligations.
Speaking about heightened economic coordination among European nations, she voiced “surprise” that a proposed regulator holding veto power over national budgets was received poorly.
She was also critical of the proposal by EU President Herman van Rompuy, and supported by France, Italy and Spain, to pool eurozone debt. That was not the way to go about it, she said, adding that providing financial aid without strings attached has meant that some countries have failed to take steps to bring their economies in line. “[A]nd therefore joint liability is the wrong answer,” she said in the report. What is needed instead, she proposed, is the aid fund: “exactly this kind of dedicated solidarity.”