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Fiscal pact insufficient to solve EU crisis

(Xinhua) Updated: 2012-06-08 07:51

BERLIN - The fiscal pact to toughen budgetary discipline in the EU is not sufficient to pull the eurozone out of the gnawing debt crisis, German Chancellor Angela Merkel and British Prime Minister David Cameron agreed here on Thursday.

The fiscal pact, which seeks to impose automatic penalty on member countries for violation of the common budgetary discipline, was "necessary but not the only precondition" to end the chronic debt woes, Merkel said at a news conference after their talks here.

Cameron, whose country did not sign the pact, said the deal was "important" but was "insufficient" to pull the eurozone out of the crisis.

"There are other things that the eurozone will have to do to make the single currency work properly," the prime minister said.

"When we look at the medium and longer term, we need more coherence, not just in terms of fiscal policy, but also in other areas," Merkel said.

Member countries should hand in power to the EU headquarters gradually in a bid to prevent such a crisis from happening again, she said.

The chancellor added that she hoped "certain parameters" within the eurozone can be harmonized.

"When one country spends nothing on research and another spends three percent of its gross domestic product, that cannot work in the long term," she said.

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