German Chancellor Angela Merkel said Wednesday that aid to Spanish banks lead “of course conditionality”, although it will be “different” to the bailouts that affect the whole country.
On the Day of the Economic Council of the Christian Democratic Union (CDU), the head of the German government praised the reforms introduced in recent months by the Spanish president, Mariano Rajoy, and described as “correct” decision to go to Madrid to help European financial clean up its banking system.
Merkel explained to his fellow that the consequences of a “housing bubble ten years,” not a nation can face alone and argued that to solve these problems exactly are the mechanisms of financial support from the European Union.
The Chancellor said that Spain, like Greece, Ireland and Portugal, must “shoulder its responsibilities”, continue with the “tough” reforms proposed and confront the “grand challenges” ahead.
“It would be fatal now in Europe where some countries have begun working in the right direction, this is interrupted and that (these countries) remain within half way,” he said.
In addition, Merkel again rejected outright the possibility of establishing so-called “Eurobonds”, as it believes that “force” an equalization of the interest paid by all eurozone countries to place their debt “is not supportive.”
He explained that the introduction of the euro brought a sharp reduction in interest rates in the eurozone and that it significantly eroded the competitiveness of some countries.
“We (the Germans) are in solidarity,” underscored the Chancellor: “But we must learn from past mistakes.”
The head of the German Government also called for improving banking supervision in the EU, suggesting that the above controls have been inadequate, and noted that this leads to a hopeless assignment of “national powers” at the European level.