German Chancellor Angela Merkel revived a proposal for a new European aid fund aimed at bolstering competitiveness, as she set out her goals for a two-day summit of European Union leaders.
Merkel, addressing lower-house lawmakers in Berlin today before traveling to Brussels, said that a “solidarity” fund serving the euro area might become possible once closer economic cooperation has been achieved.
“In concrete terms, that means binding agreements for competitiveness and growth,” Merkel said. “Allied to that I see a solidarity mechanism closely linked to conditions as conceivable, for example in the form of a euro-zone fund.”
Merkel first proposed such a mechanism in October last year, when she laid out her vision for more economic coordination including a fund “limited in time and project-based” and possibly stocked by the proposed financial transaction tax. The aim was to give member states “the opportunity to improve their competitiveness and to actually be able to implement these commitments,” she said then.
European leaders gathering in Brussels will focus their efforts on combating record unemployment in crisis-scarred countries such as Spain and Greece. Unemployment in Germany, Europe’s biggest economy, unexpectedly fell in June with the jobless rate dropping back to a two-decade low of 6.8 percent, the Federal Labor Agency said today.
Merkel, who is contesting federal elections on Sept. 22, said Germany has “broad experience” of tackling unemployment dating from the 1990 reunification of east and west. Urging Europe to go further down the road of structural reform, she said “it can’t be said often enough” that jobs rely on economic growth which is in turn dependent upon solid finances.
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