Merkel in favour of ‘two-speed Europe’

German chancellor Angela Merkel says that Germany is ready to back the use of all existing eurozone instruments to help stabilise the 17-nation euro region.

“It’s important to emphasise that we have created the instruments of support in the eurozone, that Germany is ready to work with these instruments whenever that is necessary, and that this is an expression of our firm desire to keep the euro area stable,” the chancellor said. She didn’t outline to which tools she was referring.

With Spain struggling to avoid a bailout and Greece at risk of exiting the euro, Mr Cameron and US President Barack Obama called on Europe’s leaders yesterday for an immediate plan to resolve the crisis. Ms Merkel has stepped up her opposition to debt-sharing in the euro region and rejects proposals that Spain’s banks be allowed direct access to the euro bailout funds.