Merkel says eurozone should expel members who repeatedly break financial rules

Merkel: eurozone expulsion should be possible

BERLIN — German Chancellor Angela Merkel said Wednesday there should in future be a mechanism to expel countries from the eurozone as a last resort if they persistently break its financial rules.

Merkel — whose country has Europe’s biggest economy — lent her support to recent proposals by Finance Minister Wolfgang Schaeuble for future rule changes, but made clear that they aren’t aimed at tackling the current Greek debt crisis.

“We are thinking for the future” and about how to improve rules for the 16-nation eurozone, Merkel told parliament.

That includes considering “an agreement for the future in which it is even possible as a last resort to exclude a country from the eurozone if, in the long term, it again and again fails to fulfill the conditions,” Merkel said. “Otherwise we can’t work together.”

Merkel and Schaeuble argue that the crisis has highlighted shortcomings in procedures for tackling excessive budget deficits in the nations that share the euro.

Schaeuble — with Merkel’s backing — has proposed a European Monetary Fund that could grant emergency liquidity aid under strict conditions. He also said last week that it should, in principle, be possible to throw a country out of the eurozone.

In the current debt crisis, Germany has been keen to avoid pledges of specific financial aid for Athens, stressing repeatedly that Greece needs to do its own homework and praising its efforts to rein in the deficit.

Merkel reinforced that stance Wednesday. She stressed that efforts to stem the crisis must originate with Greece, “and everything that is considered should not be directed toward our giving premature aid.”

Under pressure from the European Union to control its finances after its mounting debts hit confidence in the euro, Greece has pledged to slash its budget deficit.

“There are no alternatives to the Greek austerity program and further efforts in the coming years,” Merkel said. “The Greek government has shown a lot of courage.”