Merkel rules out relief for Italy

Merkel rules out relief for Italy

Merkel rules out relief for Italy

She said she was "absolutely open to talking to the new Italian government about ways to help young people find work" given high levels of youth unemployment.

German Chancellor Angela Merkel sat down with Frankfurter Allgemeine Zeitung to discuss the eurozone, immigration, the rise of populism, and reforms in the European Union. First, she supports the idea of turning the euro zone's ESM bailout mechanism into a European Monetary Fund that could offer short-term loans for countries under economic stress.

In her words, cohesiveness among currency block members is important, "but solidarity between European partners should not lead to a debt union but help its members to help themselves". "I am in favor of President Macron's proposal for an intervention initiative", she said. The EMF would complement other measures to strengthen the euro, including a banking and capital markets union, she said. "As such, we would be able to take under our wing countries that get into difficulties because of extraordinary circumstances". Merkel also said that a future EMF would be organised on an intergovernmental basis and national parliaments of member countries would have oversight.

The chancellor also said she backed an investment budget for the euro zone, which would possibly be in the "low two-digit billions of euros" and gradually introduced to address structural weaknesses of member states.

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Addressing European defense, Ms. Merkel said she supported Mr. Macron's proposal for closer military integration but insisted it must function within the existing EU defense cooperation structure, known as Pesco. But Andrea Nahles, leader of the center-left Social Democrats in the ruling coalition, told the ARD public broadcaster Ms. Merkel's remarks were "very pleasing" with "a totally new tone".

German Chancellor Angela Merkel held a phone conversation with Italy's new Prime Minister Giuseppe Conte on June 2.

Merkel was characteristically diplomatic when asked how she felt about the incoming populist government in Italy and the comments its euroskeptic leaders had made about Italy not being "slaves to Germany and France".

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