Merkel said the bloc's leaders would back a deal struck last month by EU finance ministers, who agreed to create the European Stabilization Mechanism (ESM) that is intended to replace a temporary mechanism from mid-2013.
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In a speech to the lower house of parliament, Merkel stressed Berlin's commitment to help its European partners but again rejected the idea of issuing joint euro bonds.
"We know that the euro is our collective destiny, and Europe is our collective future," Merkel said. "Nobody in Europe will be abandoned. Europe will succeed together."
A fund comprising up to 750 billion euros worth of support from Europe and the International Monetary Fund expires at the end of June 2013, and Merkel said the EU summit on Thursday and Friday would back the plan to replace this with the ESM.
"The declaration of euro zone finance ministers from November 28, in which the main features of the new mechanism were agreed, will be agreed by the European Council," she said.
To underpin the new mechanism, Germany has pressed for small changes to the EU's treaty, which Merkel said she hoped would be formally signed off by the bloc's leaders in March.These should then be ratified across the EU by 2012 in order to dispel any doubts that a permanent mechanism would be in place the following year, Merkel said.
However, for the European project to work, countries needed to pull in the same direction, she added.
"This is about deeper political integration, and in relation to the euro, above all deeper integration on economic policy," Merkel said. "That's why it's so important that we speak about further political integration over the next few months."
"But also that we don't make the mistake of seeing a collectivization of the risks — which would happen with euro bonds — as the solution, because it isn't the solution at all." "The solution is more harmony and more competitiveness...among EU member states and especially in the euro zone," she said.