Eurozone defense

German Chancellor Angela Merkel says Britain will remain an important member of the European Union despite refusing to join a new treaty aimed at solving the problems that led to the eurozone debt crisis.

Last week, British Prime Minister David Cameron blocked Merkel's push to bring all 27 EU members together for treaty changes. That left London isolated.

But Merkel told German lawmakers Wednesday that, while she regrets the decision, "It is beyond doubt for me that Great Britain will in future continue to be an important partner in the European Union."

She added: "Great Britain is a reliable partner for Europe not just in questions of foreign and security policy; Great Britain is also this partner in many other questions: in competitiveness, in the internal market, for trade, for climate protection."

No turning back

Merkel also used her address to the lower house of parliament to confirm progress made at the summit in the direction of a fiscal union - one of the main demands made by German lawmakers in response to the crippling debt crisis that has descended upon the eurozone.

"We are no longer just talking about a fiscal union; we have begun to make this happen. The importance of this step is not to be underestimated," a confident Merkel told the Bundestag.

Merkel went further, saying that the decisions reached at the summit were the beginning of structural changes in Europe that would permanently fix the bloc's currency problems.

"We have set a course for a new Europe … There is no turning back now," Merkel said to applause, most of which came from her conservative faction.

Despite Britain's rejection, EU leaders agreed at last week's summit to implement the EFSF rescue mechanism by the middle of 2012. In addition, it was agreed that the European Central Bank would assume responsibility for the rescue fund, and that the IMF would receive another 200 billion euros - to increase its influence in future rescue actions.

Author: Gabriel Borrud (dpa, AFP)
Editor: Michael Lawton