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Merkel excludes relief for Italy, nods Macron



BERLIN (Reuters) – German Chancellor Angela Merkel has debilitated debt relief for Italy and said in a newspaper interview published on Sunday that the principle of solidarity between member states of the eurozone should not make the single currency bloc a debt-rationing union.

REFILE – QUALITY REPEAT Chancellor Angela Merkel looks back on a press conference with Portugal's Prime Minister Antonio Costa in Lisbon, Portugal, 31
May 2018. REUTERS / Rafael Marchante

In an interview with the Frankfurter Allgemeine Zeitung, Merkel also welcomed some ideas from the French President Emmanuel Macron for more solidarity in the euro area and the wider European Union.

She said that cohesion among the members of the single currency bloc is important, "solidarity among the euro partners should never lead to debt union, it must be about helping others to help themselves."

Merkel made the remarks asked after a media report that Italy's anti-establishment 5-star movement and the right-wing extremist league had planned to ask the European Central Bank to waive 250 billion euros in Italian debt.

An Italian ruling coalition of two parties, generally viewed as euro-friendly, took power on Friday and calmed the markets, which had been frightened by the possibility of a new election and possibly a referendum on leaving the single currency can.

"I will openly address the new Italian government and work with it rather than speculating on its intentions," Merkel said in an interview published on Sunday.

EUROPEAN MONETARY FUND

Merkel, in her most thorough commentary on Macron's vision, supported the idea of ​​turning the Eurozone ESM bailout fund into a European Monetary Fund (EMF) designed to short-circuit members affected by sovereign debt problems. Maturity credit lines.

Macron wants a future EMF to serve as a buffer for future financial crises in the bloc, which was nearly torn apart in 2009 in a debt crisis.

Merkel, criticized for failing to respond swiftly and clearly Macron's proposals made in September said the bailout, known as the European Stability Mechanism (ESM), is not enough to put the eurozone before any To protect the crisis.

The EMF would complement other measures to strengthen the euro, including a Banking and Capital Markets Union, she said.

Germany has called for clarity on the parameters for risk mitigation in the banking sector before any progress can be made in completing a banking union through a deposit guarantee scheme. Merkel did not say if her concerns were clear.

"If the entire Eurozone is in danger, the EMF must be able to provide long-term loans to help the countries," Merkel told the newspaper. "Such loans would be spread over 30 years and made dependent on far-reaching structural reforms."

She added, "In addition, I can imagine the possibility of a short-term credit line, for example, five years, as such we would be able to take under our wing countries in difficulty due to exceptional circumstances . "

" PLEASURE "

Her remarks were welcomed by the Social Democrats (SPD), her Conservative's younger coalition partners, in a left-wing coalition that came to power at the beginning of the year following a September election ,

"This is very pleasing," said SPD chairman Andrea Nahles the ARD channel. "These are completely new notes from Mrs. Merkel."

The SPD criticized the conservatives' focus on austerity measures in the eurozone and urged Merkel to engage more actively with Macron in its reform proposals.

Merkel also said that a future EMF would be organized on an intergovernmental basis, and the national parliaments of the member states would have oversight.

Legislators of Merkel's conservative bloc have mocked Macron's proposal and said they are skeptical that his call for more solidarity could use the money of German taxpayer money to finance wasteful member states.

The Chancellor also said that she supports an investment budget for the euro-zone in the low tens of billions, which should be introduced step by step to address the structural weaknesses of the Member States.

In another allusion to Macron, Merkel said she has a "positive view" on his joint European military intervention force. "We will have to respond to the challenges we face in the future," she said.

Merkel congratulated Italian Prime Minister Giuseppe Conte on Saturday during a phone call on Saturday and invited him to Berlin for talks, she said.

Conte, a little-known 53-year-old law professor, was sworn in on Friday and ended three months of political stalemate following the fruitless elections on 4 March.

Merkel said she was ready to discuss with the new Italian government ways of increasing the employment rate of young people in Italy.

Letter from Joseph Nasr, additional coverage by Holger Hansen and Noah Barkin; Arrangement by Hugh Lawson / Rosalba O & Brien / David Evans


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