GERMANY’S CHANCELLOR Angela Merkel has told her national parliament that she will seek the negotiation of a new EU Treaty in order to impose greater fiscal discipline within the European Union.

Speaking in the Bundestag this morning, Merkel echoed comments given by French president Nicolas Sarkozy, who last night demanded that the EU needed major treaty change in order to fight the continuing debt crisis.

The chancellor and Sarkozy are due to hold a bilateral summit on Monday ahead of next week’s summit of EU heads of government – a summit she said this morning would focus on “treaty changes to avoid splitting the European Union”.

Europe was “on the verge of launching fiscal union”, she said, hailing the “concrete steps” that had already been taken to create a common fiscal government for members of the eurozone – before adding:

We need budget discipline and effective crisis management mechanism. So we need to change the treaties or create new treaties.

Merkel also told the parliament that Europe needed the power to sue member states through the courts if they failed to keep within pre-defined debt and budget limits.

The chancellor warned, however, that there was no ‘easy fix’ to the crisis – and said the solution could “take years.”

The German government has made it clear that the European crisis will not be solved in one fell swoop. It’s a process, and that process will take years.

Merkel insisted, however, that it was “far-fetched” to portray Germany as wanting to lead Europe – and again ruled out eurobonds as a potential solution to the debt crisis, believing them to be a breach of the German constitution.

Merkel also insisted that the European Central Bank had to remain independent of the crisis – potentially showing a split with Sarkozy and the ECB’s president Mario Draghi, who had yesterday left the door open for the ECB to play a larger role in helping to resolve it.

Sarkozy had last night told an audience in Toulon that he would seek a treaty change to “rethink the organisation of Europe” and the euro.

Her comments underline a deepening policy divide between Germany and Ireland, with both Enda Kenny and Eamon Gilmore vocally opposing treaty change in the past few days – arguing that it would not come quickly enough to fix the crisis.

Kenny had also told the Dáil on Wednesday that he believed exploiting the ECB’s ability to print currency was the only way to end the debt crisis, as only the guarantee of infinite currency could persuade investors to lend to European countries.

Additional reporting by AP

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