Merkel lowers expectations for EU summit to MPs

BERLIN Tue Dec 11, 2012 2:48pm EST

BERLIN (Reuters) - Chancellor Angela Merkel played down expectations of a deal to boost euro zone fiscal policies at an EU summit later this week in a Tuesday meeting with members of her Christian Democrats, several participants said.

Merkel told the CDU members of parliament in a closed-door Berlin meeting ahead of Thursday's European Union summit that she was skeptical about the chances for a quick agreement for deepening economic and monetary union, the participants said.

Merkel said the EU leaders should focus on agreeing steps that can be achieved in the next six months rather than trying to agree a more ambitious "road map" all the way to 2014, as EU Council President Herman Van Rompuy has proposed.

"The government leaders should concentrate on the achievability of the next steps," Merkel was quoted telling the deputies, according to one of several participants at the meeting.

"Evidently we need to first determine what is important - and for me that is things like unit labor costs, the percentage of spending on research and the percentage of state spending as well as the efficiency of the administrations," she said.

The German chancellor told the deputies that the summit should focus on a timetable for the next steps, approximately the next six months.

Merkel also said she opposes a proposal from EU institutions for a European-wide unemployment insurance. She said that one should first agree on which areas it is desirable for a closer coordination in the EU and euro zone.

At their summit in Brussels, European leaders will discuss a "roadmap" for deeper economic and monetary union, spelling out the steps required to achieve a much tighter integration of the euro zone's banking systems, budgets and finances.

Van Rompuy, European Commission President Jose Manuel Barroso, European Central Bank President Mario Draghi and the president of the Eurogroup, Jean-Claude Juncker, drafted the 15-page "roadmap" following a request from EU leaders at a summit in June.

Earlier on Tuesday, a leader of the Christian Social Union (CSU), sister party to Merkel's CDU, also criticized Van Rompuy's proposals. Gerda Hasselfeldt, the CSU parliamentary floor leader, said the "euro zone fiscal capacity" looked to her like a "transfer union" that many German MPs strongly oppose.

"That's not what we have in mind," Hasselfeldt said. "There cannot be any transfer union."

(Reporting By Andreas Rinke; writing by Erik Kirschbaum; editing by Ron Askew)

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