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Merkel: no one in Europe will be abandoned

By Geir Moulson

Associated Press

Published: Wednesday, Dec. 15 2010 5:15 a.m. MST

German Chancellor Angela Merkel drinks water after her speech at the German parliament Bundestag in Berlin on Wednesday, Dec. 15, 2010. The European council will meet in Brussels on Dec. 16, 2010 to dicuss the European finance crisis.

Markus Schreiber, Associated Press

BERLIN — German Chancellor Angela Merkel said Wednesday that no one in Europe will be abandoned in the debt crisis, but underlined her rejection of proposed pan-European bonds ahead of a summit that is to consider new rules for future eurozone crises.

Germany, Europe's biggest economy, has stamped on the idea floated by Italy and Luxembourg of issuing pan-European bonds that would support weaker countries but likely increase its own borrowing costs. It also opposes increasing the current €750 billion ($1 trillion) eurozone rescue fund.

Merkel told lawmakers in Berlin that she is personally committed to "the grandiose ideal of peace and freedom of European unification" created over the past few decades.

"No one in Europe will be left alone, no one in Europe will be abandoned — Europe succeeds together and, I would add, Europe only succeeds together," she said in a speech to parliament.

Europe should talk in the coming months about further political integration — but should not "make the mistake of making the collectivization of risk, as for example happens with euro-bonds, appear to be the solution when it isn't a solution at all," Merkel said.

Improving countries' competitiveness is a key issue, she added, along with getting budget deficits under control.

"Solidarity and improving competitiveness — and above all the budget situation too — are two sides of the same coin, and we must never forget one side of this coin," Merkel said.

She insisted that a permanent rescue mechanism to take effect once the current bailout fund expires in 2013 must foresee participation by private creditors.

EU leaders meet in Brussels Thursday and Friday amid calls for bolder action to quell the debt crisis.

"Muddling through simply won't work any more in the situation we are in and I think you know that, Mrs. Merkel," said Frank-Walter Steinmeier, the leader of the main opposition Social Democrats' parliamentary group.

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