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Merkel says permanently fixing euro zone crisis vital for Germany

Germany's Chancellor Angela Merkel addresses a news conference at the end of a European Union leaders summit in Brussels December 20, 2013. REUTERS/Francois Lenoir

By Erik Kirschbaum

BERLIN (Reuters) - Chancellor Angela Merkel will tell Germans their fate is so closely entwined with the European Union that it is imperative to come up with answers on how to permanently resolve the euro zone's sovereign debt crisis.

In an advance text of the traditional New Year's Eve address that she will deliver on Tuesday evening, Merkel said Germany had a lot of work to do to maintain its own economic strength.

Merkel, who was recently re-elected to a third term, said major goals were to keep working to improve Germany's budget balance and to make a successful transition from reliance on nuclear and fossil fuel energy to more renewable energy.

"We all know that the progress of our country is as dependent as ever on making headway in Europe and on enduringly overcoming the sovereign debt crisis in earnest," Merkel, 59, said in the address, to be aired on public TV networks.

Germany, the EU's paymaster, has been at the heart of the euro zone crisis. The EU's largest economy has enjoyed steady growth and falling unemployment, in sharp contrast to some of its euro zone partners.

But many Germans have been leery about providing financial support to struggling euro zone countries. Merkel's government was also initially reserved about assisting other countries, which economists say exacerbated the crisis.

Merkel, who spent three months after winning reelection on September 22 on forming a new right-left 'grand coalition' government that took power in December, did not offer details about reform plans.

Her new coalition has set an ambitious target of more than doubling Germany's share of renewable energy by 2025 to 40 to 45 percent from about 25 percent currently.

"There's a lot of work to do so that Germany will remain strong in the future as well," Merkel said in the address.

"What's especially important for me is that we put our finances in order for future generations and that we're successful with the energy transformation," she said.

Germany has been working to reduce its budget deficits in the last decade, aiming to achieve balanced budgets from 2013 to 2015 and a surplus of 0.5 percent of gross domestic product (GDP) in 2016 and 2017.

(Editing by Ruth Pitchford)