No Magic Wand

Merkel’s Bailout Warning

Giving the opening address of the World Economic Forum’s annual meeting, German Chancellor Angela Merkel cautioned the crowd that Germany will not be making promises it cannot keep in the European bailout effort. Merkel strongly defended the euro and the European Union but also stressed that changes had to be made within the organization in order to stymie the crisis. She explained that "there is a clear lack of political structures and underpinnings to make this work." As the situation in Europe continues to worsen, with the IMF reducing its prediction of the world’s 2012 economic growth to 3.3 percent, Merkel has called for more political unity within the EU in addition to austerity measures. Despite the grim outlook and Merkel’s own warnings, she remained hopeful, telling the Davos attendees, "We are not going to become faint-hearted. We will not be able to wave a magic wand to address this.”