Sovereign debt crisis threw Europe into the most difficult period after the Second World War, said on Monday, German Chancellor Angela Merkel, according to CNBC. Merkel said in a speech at a meeting of his own party, she fears that if the euro will collapse, the whole Europe will fail, and promised to do everything possible to prevent such a situation. Europe must create new structures for a stronger integration of member states, added Merkel.
Sanctions are needed to automatically activate when countries violate the Stability and Growth Pact. The head of the German government has asked again the introduction of a bank tax for bank transactions and prohibiting the sale of shares by default, if not at a global, at least in the euro area. In a short sale, a broker borrows shares from the owner for a short period of time. The broker sells then the shares hoping to make a profit on a decline of shares when he will purchase them to return them to the owner that he bought them from.
The Chancellor tried to prepare her political party, Christian Democratic Union, for the coming months to combat the crisis and efforts to promote integration and stronger fiscal policy in Europe, CNBC notes.
“These events can be very important for providing support within the party. We saw governments shut down by the crisis. It is clear that Merkel must present to the supporters a strong case on the current course”, said Gerd Langguth, a political science researcher from the University of Bonn and Merkel biographer.
Christian Democratic Union is the party of former Chancellor Helmut Kohl, who led Germany’s transition to the euro. 13 years later, however, many party members are unhappy with the use of German money to save some euro area countries with problems, strongly rejecting fiscal slippages in countries such as Greece and fear that independence could be compromised for the European Central Bank. Some members consider even that the whole eurozone project was a mistake that must now be repaired.