Merkel urges rapid move to closer union

MoneyControl:  German Chancellor Angela Merkel voiced support for ECB President Mario Draghi's crisis-fighting strategy on Thursday and pressed her European partners to move swiftly towards a closer integration of fiscal policies, saying time was running short.

On a visit to the Canadian capital Ottawa, where she held talks with Prime Minister Stephen Harper on the euro crisis, an EU-Canada free trade agreement and the situation in Syria, Merkel sent a message to her fellow European leaders ahead of a series of top-level meetings next week.

"I made clear once again that we need a long-term, sustainable solution," Merkel said at a joint news conference with Harper in the Canadian parliament building.

"It is a question of taking the steps that weren't taken when the currency union was created, namely a political union," she said. "Germany knows that in a common currency area political responsibilities need to be shared. We are on a good path on many of these issues, but time is of the essence. We are fully aware of this."

Merkel has resisted pressure to introduce common euro zone bonds as a solution to the bloc's three-year old debt crisis and is instead pressing her partners to move towards a so-called "fiscal union" under which states would cede sovereignty over their budgets to Brussels.

However many euro zone leaders, including France's president Francois Hollande with whom she will meet next week, are reluctant to go along.

Merkel said the European Commission should receive stronger powers to intervene when the budgets of euro states went off course, a push that puts her on a collision course with Hollande and others.

Merkel won support for her strategy from Canada's Harper, whose government has criticised Europe in the past for moving too slow. He said Canada had "every confidence" that European leaders would meet the challenge posed by a crisis which some experts fear could rip the 13-year old euro bloc apart.

"Europe has taken a number of very important steps and we know that there are additional things that need to be done," Harper said.

Merkel voiced support for European Central Bank President Mario Draghi, who came under withering criticism in Germany for vowing in a speech in London last month to do whatever it takes to save the euro, and raising the prospect of buying the bonds of stricken euro states like Spain and Italy.

She said Draghi's declarations were "completely in line" with the approach taken by European leaders.

Merkel will meet with Hollande and Greek President Antonis Samaras in Berlin next week, the start of a flurry of bilateral meetings leading up to a crucial decision on September 12 by Germany's Constitutional Court on whether the euro zone's new bailout facility is compatible with German law.