BERLIN (AFP) - German Chancellor Angela Merkel said on Wednesday she sees no need to change Europe's budget rules after her economy minister suggested that countries be given more time to get their finances in order.
"We're agreed: there is no need to change the Stability Pact," Merkel told reporters, referring to a strict set of EU fiscal rules requiring member states to keep their deficits in check.
"The Stability Pact as it now stands already contains all the flexibility we need to overcome the problems. We're all convinced of that," Merkel told a joint news conference with Tunisian Prime Minister Mehdi Jomaa.
German economy minister and deputy chancellor Sigmar Gabriel had hinted in a newspaper interview that countries such as France and Italy could be given more time to get their finances in order.
In comments that could re-start a debate over austerity and growth in Europe, Gabriel struck a conciliatory tone to countries struggling to meet the conditions of the Stability Pact.
"I'm in favour of more honesty in the debate," he told German daily Bild.
"We Germans are in better shape than other countries because we pushed through a tough reform programme. But we, too, needed time to cut our state debt," Gabriel said.
Under EU rules, budget deficits - the shortfall between government income and spending - should not be more than 3.0 percent of annual gross domestic product.
Accumulated debt - the sum of all those annual deficits - is supposed to be kept at 60 percent of GDP.
Merkel said she had consulted with Gabriel, the head of the Social Democrat party, ahead of a regular cabinet meeting.
On Monday, Gabriel had joined his French counterpart Arnaud Montebourg in calling for more time for indebted European countries to implement reforms to rein in their budget deficits.
The conservatives in Germany's left-right coalition government are opposed to any easing of deficit rules.
On Tuesday, the French national accounting court said that France was set to miss its extended target for reducing its public deficit this year.