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German chancellor calls for overhaul of European Union


German Chancellor Angela Merkel called for an overhaul of the European Union, advocating closer political ties and tighter budget rules, in her most explicit prescription for ending the debt crisis, Bloomberg reported.

Speaking to her Christian Democratic Union party’s annual congress today in the eastern German city of Leipzig, Merkel said leaders must create a “new Europe” by deepening ties in the 27-nation European Union (EU). At the same time, she repeated Germany’s rejection of jointly sold euro bonds.

“The task of our generation now is to complete the economic and currency union in Europe and, step by step, create a political union,” Merkel said. “It’s time for a breakthrough to a new Europe.”

Merkel’s address marks an escalation in her rhetoric as the debt crisis that began in Greece in October 2009 sent Italian and Spanish borrowing costs to euro-era records last week and roiled French markets. After leadership changes in Italy and Greece, the chancellor is turning her attention to shaping the euro and the EU’s future.

Merkel renewed her warning that “if the euro fails, Europe fails” and said her mission was to save the “historic” EU project.

She warned that “Europe is in one of its toughest, perhaps the toughest hour since World War II,” Reuters reported.

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