Bloomberg News

Merkel Says Joint Liability Won’t Mean Happiness

September 25, 2012

German Chancellor Angela Merkel said other euro-area countries can’t expect her to support the “false happiness” of shared liability to stem the debt crisis because the root causes have become clear to everyone.

Almost three years into the financial crisis that is tugging at the currency union, Merkel said policy makers agree with her assessment that the causes of the “crisis of confidence” in the euro area are excessive debt and gaps in competitiveness.

“This analysis is, I believe, generally shared,” the chancellor said in a speech to the annual meeting of Germany’s BDI industry association in Berlin. “That’s already something. If you want to solve a problem, you at least have to be on the same basis when you ask about the cause. This wasn’t always the case at the start.”

While “calls for mutualization” are misguided and would lead to “fatally wrong incentives,” a united Europe is worth defending, she said. “But this good fortune can’t lead to a false happiness where we look into each other’s eyes and smile without talking about the real problems. The more united we are, the more honest we have to be with each other.”

Draghi, Lagarde

Merkel was speaking before she hosts European Central Bank President Mario Draghi for talks at the Chancellery in Berlin to be followed tomorrow by a meeting with International Monetary Fund chief Christine Lagarde. The crisis talks take place as Spain deliberates over requesting a bailout and leaders await a report into Greece’s finances by the so-called troika of monitors: the IMF, the ECB and the European Commission.

Addressing the audience of German executives and politicians, Merkel stuck by her stance that joint policies to combat the crisis require an increase in joint oversight. The “right sequence of events” must be followed and “that’s why we still have a lot of tasks ahead of us.”

BDI head Hans-Peter Keitel said the industry group backs Merkel’s stance of seeking to preserve the euro while imposing strict conditions.

“Madame Chancellor, we are watching your political and personal engagement for Europe with respect, appreciation and gratitude,” Keitel said in his conference speech.

To contact the reporter on this story: Tony Czuczka ion Berlin at

To contact the editor responsible for this story: James Hertling at

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