BERLIN
German Chancellor Angela Merkel has warned the Eurozone will not work in the long run if member states fail to closely coordinate their economic policies.
Speaking at a European Investment Bank conference in Berlin on Monday, Merkel called for major economic and financial reforms within the EU.
She said: "Can we have a currency union without having an economic union, is the question.
"And I would clearly say that in the long run, this would not work."
Merkel called on EU member states to take lessons from the financial crisis and focus on reforms that would strengthen competitiveness.
'Root causes'
She argued that excessive public debts, lack of productivity, lack of innovation and problems in the banking sector were the root causes of the crisis.
Merkel said: "Everything that we wish to do in order to generate growth will not be crowned with success if the competitiveness of the EU member states is not sufficiently high.
"As member states of the Eurozone, as states that have the common euro currency, we should be more ready and willing to strongly coordinate our economic policies."
The chancellor said EU member states would soon begin discussions on reforms to make the European Union more efficient.
Merkel said: "The European Commission, together with the Euro Group chairmanship, and also the European Central Bank, has taken a closer look at the root causes of the crisis and prepare a document.
"We will discuss proposals as to how we can render the EU more resilient in future."
'Good future'
The German chancellor hailed Ireland, Portugal and Spain for successfully concluding their programs and overcoming crisis and expressed her support for the Eurozone’s deal with Athens for the four-month extension of Greece’s bailout.
"This opens up an opportunity to bring this program to a successful conclusion on the basis of the conditions contained therein," Merkel said.
But she demanded Athens present a more detailed list on reform commitments.
She said: "Greece tabled the first list of reform measures. Now it needs to specify those reform measures and agree on them with the three institutions -- the European Commission, European Central Bank and the IMF.
"It is on this basis that I wish for Greece a good future as a member of the Eurozone."
Sudden turn
The German government has long viewed national budget deficits as the main reasons for the financial crisis in Europe, insisted on austerity measures and called for supervision of finance policies by Brussels.
Berlin only agreed to approve the extension of Greece’s €240 billion ($274 billion) bailout deal last Friday after Athens promised to continue with economic and financial reforms.
Greece’s young coalition government, led by left-wing SYRIZA, made a sudden turn away from its core electoral promises of overturning the bailout program by imposing a large "haircut" on Greece’s external creditors and hiring public sector employees.
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