German leader calls for greater political and economic ties with China

BEIJING - German Chancellor Angela Merkel defended the euro while asking for more time to solve the debt crisis in Europe, during a speech at the Chinese Academy of Social Sciences on Thursday.

"As our common currency, the euro has made Europe stronger, and Germany itself has benefited from the currency ... The European Union, especially those states that have adopted the euro, has made considerable progress in the last two years," Merkel said.

"The common currency must be defended together (by the countries in EU)," said Merkel, responding to doubts over the EU's ability to overcome the difficulties.

The fiscal compact treaty signed by 25 EU members in Brussels on Jan 30 at the latest EU summit will help ease the debt crisis in Europe, she added.

The treaty will require governments to introduce laws on balanced budgets and impose near-automatic sanctions on countries that violate the deficit rules.

Europe is racing against time, and it is trying to attract more investment and get rid of bureaucracy, but people have to be patient to see favorable results from these measures, said Merkel.

"Just like the measures on labor force reform taken by former German chancellor (Gerhard) Schroeder in 2003 and 2004, the results were not seen until 2006 and 2007," Merkel said.

If people treat the debt crisis with undue haste, worries will be created among people, which will have no positive influence on the situation, Merkel added.

Speaking highly of Sino-German ties since the establishment of the government consultation mechanism last year, the chancellor also called for more political and economic cooperation, including the development of new energy technologies, reform of the international monetary system, and exchanges between Chinese and German small- and medium-sized enterprises.

China and Germany should improve fiscal cooperation, said Merkel, noting that a lack of financial market supervision was one of the reasons for the current financial crisis.

Merkel's speech also covered the different views held by China and Germany on sanctions on Iran, as well as the Syria issue.

"The main task for Merkel during this visit is to show confidence in the euro to Beijing and the Chinese people," said Cui Hongjian, an expert on European studies at China Institute of International Studies.

"We should scrap the mode of thinking that China can only help Europe through buying its bonds. We could also focus on how China and Germany can cooperate in boosting economic growth and creating more job opportunities," Cui told China Daily after Merkel's speech.

China Daily

(China Daily 02/03/2012 page11)