Solidarity in euro zone should not lead to debt union: Merkel

German Chancellor Angela Merkel at a news conference in Lisbon, Portugal, on May 31, 2018.
German Chancellor Angela Merkel at a news conference in Lisbon, Portugal, on May 31, 2018. PHOTO: REUTERS

BERLIN (REUTERS) - German Chancellor Angela Merkel appeared on Saturday (June 2) to rule out debt relief for Italy, saying in a newspaper interview that the principle of solidarity among members of the euro zone should not turn the single currency bloc into a debt-sharing union.

Merkel made the remarks in an interview with the Frankfurter Allgemeine Sonntagszeitung when asked about a media report that the anti-establishment 5-Star Movement and far-right League had planned to ask the European Central Bank to forgive 250 billion euros (S$350 billion) of Italian debt.

She said that while solidarity among members of the single currency bloc was important that principle "should not lead to a debt union." An Italian governing coalition of two parties generally seen as hostile to the euro took power on Friday, calming markets that had been spooked by the possibility of a new election that might have effectively become a referendum on whether to leave the single currency.

"I will approach the new Italian government openly and work with it instead of speculating about it intentions," Merkel told the paper in an interview to be published on Sunday.

Merkel congratulated Italian Prime Minister Giuseppe Conte in a phone call on Saturday and invited him for talks in Berlin, her office said.

Conte, a little-known 53-year-old law professor, was sworn in on Friday, ending three months of political deadlock in the wake of inconclusive March 4 elections.

Merkel said she was willing to discuss with the new Italian government ways to boost employment rates among young people in Italy.