Denmark tells Merkel solve crisis before treaty change

(BERLIN) - German Chancellor Angela Merkel faced more problems Thursday over calls for EU treaty changes to shore up the euro, ahead of talks with an increasingly eurosceptic British Prime Minister David Cameron.

Prime Minister Helle Thorning-Schmidt of Denmark, the next country to hold the EU presidency, challenged Merkel's views on how to lead Europe out of what the German leader has called perhaps the worst crisis since World War II.

While Merkel stressed at a joint press conference the need for "limited treaty changes" to punish those who breach fiscal rules and to help restore EU credibility, Thorning-Schmidt said the bloc did not have time for the haggling that that would entail.

"It is my hope that if we have to discuss treaty changes it will be a narrow process. I think it is very, very important that we focus on solving the (budgetary) discipline crisis and having sound economies in Europe," she said, referring to a planned debate on the issue at an EU summit in December.

"We think we should do first things first -- first solve the crisis and then we can discuss how to create more discipline at a later stage," said Thorning-Schmidt, who took office last month and will hold the six-month EU presidency from January 1.

Merkel said the struggling 17-member eurozone, a core group within the 27-member EU, required a "greater degree of integration, of commitment" to survive as a currency union. Denmark does not belong to the eurozone.

The chancellor has called for states that repeatedly violate the debt and deficit limits laid out in the EU's Stability and Growth Pact to be hauled before the European Court of Justice, a move which would require changes to the EU rule book.

After meeting Merkel Wednesday, Irish Prime Minister Enda Kenny said he would prefer to see current mechanisms at the EU's disposal exhausted before contemplating treaty change, amid widespread reticence in the bloc on the German approach.

Several countries including Britain, which is not a eurozone member, are resisting efforts to see more central authority handed to Brussels.

Cameron lashed out this week in a strikingly eurosceptic speech against "grand plans and utopian visions" and called for an EU with "the flexibility of a network, not the rigidity of a bloc".

The EU's 10 non-eurozone members have expressed concern that tighter policy links within the currency bloc could accelerate the development of a "two-speed" Europe to their disadvantage.

"I have no problem understanding that the 17 need to take certain decisions but I think it is also important to stress again and again that the 27 should stick together... because we are strongest, and have the strongest union, if we stick together," Thorning-Schmidt said.

Merkel nevertheless expressed hope that Denmark could help bridge the differences between those inside and outside the eurozone.

EU officials are working on proposals to strengthen the eurozone and stem some of the turmoil that has rocked global markets in recent months, which will be put to European leaders at a December 9 summit.