Europe must take "deep breath" and enact reforms says Merkel

BERLIN (REUTERS) - Chancellor Angela Merkel said on Tuesday that Europe could only hope to come out of its crisis stronger and compete in a globalised world if its members pressed ahead with painful reforms and moved to more responsible budget policies.

Speaking at a meeting of the Federation of German Industries (BDI), Dr Merkel acknowledged that Germany was "not an island" that could disconnect from economic developments in Europe and the world economy.

But she placed the onus on Berlin's struggling euro zone partners to fix their own economies, rejecting the idea that Germany should relax its own productivity drive in order to help its partners.

"We need to take a deep breath to overcome this crisis," Dr Merkel said. "We must make the efforts that will allow Europe to come out of this crisis stronger than it went in."