State of Merkel's union

Merkel's 90-minute sit-down with reporters on Monday in Berlin touched on multiple aspects of the debt crisis facing eurozone nations, as well as the fears of recession that has slowed many European economies to a crawl.

Speaking in broad terms, Merkel said there would be no "big bang" solution to the EU's ills. Instead, a series of small steps would lead the bloc out of its current tough times.

She said Europe needed to prove "that we learned from our previously faulty debt policies." That, Merkel said, is the key to nations digging themselves out deep debt and making politicians "independent of the markets telling us what we have to do."

Part of the path forward for Europe involves the evolving role of fiscal supervision in the EU. Some have called for a supervisory board to ensure that similar debt difficulties cannot surface in the future.

"We need an authority that is credible to the rest of the world," Merkel said. "Their second task can then be implementation of the ESM."

The ESM, or European Stability Mechanism, is the EU's permanent bailout fund, which was only recently given the green light by Germany's Constitutional Court.

Merkel also brought up the debt crisis's poster child, Greece, which has been forced to implement harsh austerity measures in return for international bailouts in order to stave off defaulting on its debt. She said Germany wanted Greece to be successful, but it was important that the country carry out its promised reforms, which have had a great impact on ordinary Greeks.

"It breaks my heart, because many people can't do anything about it," Merkel said of the dire straits faced by many Greeks. She criticized wealthy Greeks who are trying to avoid paying their share in taxes.

Briefly addressing the violence that has been seen over the past week in response to an anti-Islam video, Merkel said that while it was important to respect freedom of opinion, there was no excuse for acts of violence.

With one year to go before national elections, Merkel said she would like to continue heading a coalition of her Christian Democrats and the Free Democrats, but did not rule out a new coalition partner. The Free Democrats have performed disastrously in a string of recent state elections, suggesting that they may not remain a viable partner for Merkel's Christian Democrats.

mz/msh (dpa, dapd)