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December 13, 2011

German Leader Says No Simple, Quick Fix for Euro Crisis

German Chancellor Angela Merkel says there are no easy or fast solutions to Europe's economic crisis, but the agreement by eurozone countries last week for more fiscal discipline was a good step.

Merkel's comments at the German parliament came as financial markets indicated continued unease over the Europe debt crisis, driving the value of the continent's common currency, the euro, to its lowest level in nearly a year. Major stock market indexes also were down on Wednesday.

The German leader said while the path to full "fiscal union" in the EU would be a long process that may take years, she felt the process started at last week's EU summit in Brussels was "irrevocable."

Merkel said she believed that "the opportunities of this crisis are much larger than its risks."

Two international rating agencies, Moody's and Fitch, said Monday they were still watching the creditworthiness of European countries because of the belief that the summit did not result in significant action to solve Europe's short and long-term debt and economic problems.

On Friday, all 17 countries that use the euro and many non-euro EU members agreed to a plan that includes more central oversight of countries' budgets, in an effort to prevent them from running up the debts that caused the economic crisis in Europe and caused concern for the global economy. Britain opposed the plan and said it would not join.

EU leaders hoped the plan would calm months of volatility in financial markets by offering a long-term solution to the eurozone government debt crisis. Greece, Portugal and Ireland already have received international bailouts because of their overwhelming sovereign debt, and some analysts feared even greater needs from heavily indebted Spain and Italy.

Any new treaty will have to obtain final ratification from member countries. EU officials said they expect it to be signed by March.

Some information for this report was provided by AP, AFP and Reuters.