Merkel Dashes Hopes for Money Injection for EU Bailout Fund

Finance | January 25, 2012, Wednesday // 20:31|  views

Angela Merkel, Federal Chancellor of Germany, attends the opening plenary session on the first day of the 42nd Annual Meeting of the World Economic Forum (WEF) in Davos, Switzerland, 25 January 2012. EPA/BGNES

German Chancellor Angela Merkel has warned that Germany was not prepared to expose itself to further damage on the markets in order to save the euro zone.

"We have said right from the start that we want to stand up for the euro, but what we don't want is a situation where we are forced to promise something that we will not be able to fulfill," Merkel told the annual World Economic Forum in Davos, Switzerland, as cited by international media.

Merkel acknowledged Germany was the continent's economic powerhouse but said that does not mean it could act at will.

"If Germany, for example, on behalf of all the other member countries, were promising something that -- if the markets really attack us we would not be able to come up with -- then we have indeed an open flank," she said.

Merkel's statement comes just as the IMF called for a pooling of rescue funds, and Italy's new prime minister Mario Monti voiced hopes that Germany will take on a greater role in the euro zone crisis.

Urging the European Union to act more like a central government for the region, she acknowledged that the countries that share the euro do not have the "political structures" to make the common currency work properly.

"The message is that we are ready for more commitment. We are no longer making excuses ... That is important because otherwise we will continue to lose credibility," Merkel said.

She said the euro's shortcomings "arose over years, so they can't be overcome in one fell swoop."

"It will take time to overcome these shortcomings," she added, "but we are determined to do this."

The annual meeting of the world's political and business elite began in Davos Wednesday amid what has been described by international commentators as a "deep sense of gloom" about the state of the world economy, particularly in the euro zone.

In her speech, the German Chancellor sought to strike an optimistic tone.

"Europe will become more attractive (for foreign investors) once we've got through this euro crisis, and I'm sure that we will get through it," she said.

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Tags: Angela Merkel, Germany, German Chancellor, EU, euro zone, Eurozone, bailout fund, EFSF bailout fund, EFSF


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