Merkel urges giving up more powers to Europe amid crisis, stresses need for political union

BERLIN – German Chancellor Angela Merkel is calling for countries to give up more powers to Europe “step by step” as the continent tries to claw its way out of the debt crisis and says a “political union” is needed as leaders prepare for a closely watched summit later this month.

However, Merkel, who appeared on ARD public television’s breakfast show Thursday amid pressure on Germany to defuse the crisis, downplayed prospects of reaching a big solution to Europe’s troubles at the June 28-29 summit in Brussels. The troubles of Spain’s banking system and concern over Greece’s future in the 17-country eurozone are generating uncertainty.

“I don’t think that there is a single summit at which the big design will appear, but what we have been doing for some time and where a working plan will certainly be presented … is that we say we need more Europe,” Merkel said.

“We need not just a currency union; we also need a so-called fiscal union, more common budget policies. And we need above all a political union,” she added. “That means that we must, step by step as things go forward, give up powers to Europe as well.”

Merkel, who has faced criticism for focusing on austerity as a cure to Europe’s financial woes, insisted anew that she is interested in growth, but that “budget consolidation and growth are two sides of one and the same coin.”

“Without solid finances, there is no growth, but solid finances alone are not enough; there are other points — above all, questions of competitiveness,” she said.