A deal to aid vulnerable euro economies remains valid, but will require the “full involvement” of EU member states, German Foreign Minister Guido Westerwelle said in an interview published yesterday.
Westerwelle was responding to doubts expressed by Finland, the Netherlands and Slovakia over the agreement at a summit last week to use the EU’s European Stability Mechanism bailout fund to carry out bond purchases on the secondary market.
“What was agreed by the European Union remains valid,” Westerwelle said, ahead of talks between the main proponent of the deal, Italian Prime Minister Mario Monti, and German Chancellor Angela Merkel in Rome later yesterday.
“For us it is important for political and constitutional reasons that all further steps to exit the crisis take place with the full involvement of national governments and parliaments,” he said.
“Only by sticking together as Europeans will we manage to get out of the crisis,” he added, as a key meeting of eurozone finance ministers expected to thrash out the details of the agreement looms on Monday.
The minister also reiterated Germany’s opposition to a pooling eurozone countries’ debt in the form of eurobonds.
“A mutualization of debt in Europe would be a fundamental construction error, which would put the European idea at risk. That is why this is not an objective for Germany, even in the long term,” Westerwelle said.
“Too little solidarity puts Europe at risk, but too much solidarity puts it equally at risk. The capacity for resistance of the economy and of German taxpayers is not unlimited,” he added.
Monti also said in an interview yesterday that a pooling of eurozone countries’ debt, in the form of eurobonds, must be accompanied by increased budget control at a European level.
“We need a partial mutualization of debt, but also more central control of national budgets,” Monti told the daily Frankfurter Allgemeine Zeitung.
“Without proper control it would be irresponsible to burden others with a share of your own debt,” he said.
“Germany and Italy take the same line on this and are prepared to surrender national sovereignty,” Monti added.
Monti insisted that Italy “isn’t calling for a rescue and isn’t calling for eurobonds.”
Monti conceded that his government would not be able to solve the deep structural problems facing Italy in the limited term his government had left in office.