LEAD: Merkel affirms demand for financial transaction tax

Nov 14, 2011, 11:57 GMT

Berlin - German Chancellor Angela Merkel affirmed Monday her demand for an EU tax on financial transactions and called for changes in the eurozone to punish nations that break rules against deficits.

'We must further develop the structures of the European Union and develop it in such a way that the euro has a future,' she told 1,000 members of her Christian Democratic Union (CDU) in the eastern city of Leipzig at their annual party conference.

Merkel focused much of her speech on stricter government of the eurozone and aiding Germans on low incomes, saying those were the topics that CDU grass-roots members felt strongest about.

Referring to US and British opposition to a tax on market transactions, Merkel said, 'If we don't get it globally, if we don't get it in the European Union, then let it at least apply in the eurozone.'

Urging tougher treatment of nations breaching the Maastricht agreements against deficits which underpin the euro common currency, she said, 'The rules of the Stability and Growth Pact have been broken approximately 60 times. Nothing happened.'

Merkel called for 'automatic' penalties and treaty changes 'in the direction of genuinely shared responsibility.'

She defended her handling of the debt crisis, saying, 'We have to ensure that Europe comes out of the crisis stronger than when it went in.'

Traditionally a centre-right party that is reluctant to over-regulate the economy, the CDU has adopted a more centrist emphasis under Merkel with an eye to the next general election in 2013.

In a move to the left, it was expected to call Monday evening for a minimum wage to boost the income of the very low paid.

Merkel said Germany now had many people working two or three jobs to make a living. 'That is not compatible with our vision,' she said.

The CDU executive has recommended that the government usher in a de-facto minimum wage which would apply throughout Germany, but had to soothe those in the party who oppose government regulation of pay.

She said the rates would be set by independent panels of employers and trade unions, not by the government.

'None of us want a national, universal, politically ordained, legal minimum wage,' she said. 'We want a lower limit on pay where there are no collective wage agreements.' Minimum pay for non-unionized workers would thus be close to union-bargained rates.

Merkel said her government had brought the tally of unemployed in Germany below 3 million, adding, 'That is a wonderful figure.'

'Today we are better off than we have been for a long time,' she said.

Merkel also urged the party to ease some of Germany's immigration restrictions.

'If we need specialists, and if we find that a rush to Germany by qualified talent doesn't happen, then we must create the conditions so that they come to work among us and don't go elsewhere in the world,' she said.