Germany spurned investor calls to maximise financial firepower to calm markets, saying its fast-track proposals for European Union treaty change to enforce budget discipline are key to solving the euro-area debt crisis.
Germany is working with "an ambitious timeline because we believe that Europe can't wait for this forever, but that it should also be possible to put such limited change into effect in what for some is a surprisingly short time," Chancellor Angela Merkel's chief spokesman, Steffen Seibert, told reporters in Berlin today.
Merkel will deliver a speech on the crisis to the lower house of parliament in Berlin on Dec. 2, previewing a Dec. 8-9 summit of European leaders that is due to discuss proposals for treaty change, Seibert said.
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Stocks rose for the first time in 11 days and U.S. equity futures, commodities and the euro all advanced today on speculation that leaders are stepping up their efforts to resolve the sovereign debt crisis. As euro-area finance chiefs prepare to meet in Brussels tomorrow, Germany continues to reject joint euro-area bonds or attempts to deploy the European Central Bank to fight the crisis, Finance Minister Wolfgang Schaeuble said yesterday.
Germany and Europe don't have "unlimited financial strength" to counter the debt crisis, Seibert said. "That is precisely why the German government reacts so skeptically to the many calls for Europe to finally free up the really big, final financial reserves, which the Anglo-Saxon world likes to call showing the bazooka," he said. "We in Europe can't pretend financial strength that we don't have."
The euro rose from an eight-week low versus the dollar, advancing 1 percent to $1.3373 as of 12:30 p.m. in Frankfurt. The benchmark Stoxx Europe 600 Index gained 2.7 percent to 227.49 at 11:07 a.m. in London, its biggest advance in a month.
Bloomberg News
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