Merkel urges gradual fiscal union in Europe

German Chancellor Angela Merkel has called for Europe to take a gradual path towards political union , frustrating the appeals of many of her colleagues for quick, bold moves to fight the continent's raging financial crisis.

After a meeting with British Prime Minister David Cameron, who called for "urgent action," Merkel noted on Thursday that the debt crisis has built over the 10 years of the currency's existence and cannot be fixed overnight.

"Now it will also take a few years to get things right again," she said.

There are big expectations in financial markets that European leaders will agree at a summit on June 28 some new measures to fight the crisis, but Merkel waved the notion away, saying no single meeting would solve the continent's problems.

Experts say the eurozone's structure is not sustainable because while 17 countries share the same currency and interest rates, national governments retain control of budget policies. That means economies are radically different. In times of economic stability that was not a problem, but as financial turmoil grew, the weaker economies lagged behind the stronger ones.

That's why European leaders, including Merkel, agree they need to work toward a fiscal union, in which governments pool their spending decisions and their debt responsibility. The question is how quickly that is achieved.

Merkel says it should be gradual. "We must, step by step as things go forward, give up powers to Europe as well," she said earlier Thursday on ARD public television.

Such a cautious approach to the crisis is frustrating many European officials and fellow leaders as the 17-country eurozone flirts with disaster - Greek politicians threaten to pull the country out of the currency bloc and Spain is at risk of bankruptcy.

European officials in Brussels and several eurozone countries are pushing Germany to accept new measures - such as jointly guaranteed debt, called eurobonds, or a central banking authority - that would help defuse concerns about excessive debt in weak countries.

But Berlin is against such steps in the near term, worrying they would lower incentives for weak states to fix their finances and would cost German taxpayers more money.

Merkel wants all eurozone governments to have sound finances before agreeing to link the bloc's finances more closely. Her critics argue that because of the current crisis, greater fiscal union cannot wait.