Solidarity in euro zone should not lead to debt union - Merkel

Solidarity in euro zone should not lead to debt union - Merkel

German Chancellor Angela Merkel has proferred a solution to cushion the effect of the imposition of new tariffs by President Donald Trump on the importation of steel and aluminum which has sparked outrage by allies of the United States of America.

Although Merkel's budget target falls short of the range proposed by Macron, it represents a concession of sorts to his view that excessive austerity has undermined faith in the bloc.

Merkel made the remarks when asked about a media report that Italy's anti-establishment 5-Star Movement and far-right League had planned to ask the European Central Bank to forgive 250 billion euros ($296 billion) of Italian debt.

Merkel said she was willing to discuss with the new Italian government ways to boost employment rates among young people in Italy.

"I will approach the new Italian government openly and work with it instead of speculating about its intentions", Merkel told the paper in an interview published on Sunday.

Crises roiling Europe have focused minds in recent days, with a populist and eurosceptic government taking power in Italy and Spain ousting veteran Prime Minister Mariano Rajoy over a corruption scandal and his Socialist arch-rival Pedro Sanchez taking over.

But Merkel was adamant that solidarity among eurozone countries should not lead to a "debt union". He also called for a shared European military intervention force and defense budget.

To deal with Europe's migration flux, Macron called for a European asylum agency and standard EU identity documents.

Merkel said in Sunday's interview that she supports creating a European Monetary Fund - similar to the International Monetary Fund - that could help stabilize the eurozone by offering long- or short-term loans to member nations.

Merkel backed the step-by-step introduction of a euro zone investment budget in the low double-digit billions of euros, saying this could be housed within the European Union budget or outside.



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