I Want Greece to Stay in the Euro: Merkel to CNBC

German Chancellor Angela Merkel reiterated on Wednesday that Germany wants Greece to stay in the euro, but warned that the country must play by the rules and honor its commitments.

German Chancellor Angela Merkel
Michael Gottschalk | AFP | Getty Images
German Chancellor Angela Merkel

In an interview with CNBC's "Worldwide Exchange," Merkel said: "I want, just like Jean-Claude Juncker, that Greece stays in the euro. I think that would be good for Greece and for all of us."

"If Greece believes that we can find more stimulus in Europe in addition to the Memorandum (the deal stuck with the Troika), then we have to talk about that," she said, but she underlined that Greece and its euro zone partners had to be able to trust each other.

Greek politicians failed to reach an agreement on a new government after inconclusive elections on May 6. Some Greek parties oppose the European Union and International Monetary Fund bailout for the country, but some experts warned Greece would be worse off outside the euro zone.

Merkel said a growth element could be added to Europe's fiscal pact, an agreement struck by 25 of the European Union's member states to keep deficits under control.

Throughout the crisis, Merkel has consistently said countries need to reduce their deficits and high levels of debt.

But critics, including new French President Francois Hollande say a shift to growth measures away from austerity alone is needed to help Europe recover.

Merkel pointed out that the fiscal compact, the agreement on fiscal discipline, was approved by most European Union leaders.

"The fiscal compact has been signed. It has been signed by 25 members and actually three have already ratified it," she said, adding that leaders would now continue their discussions on growth.

"On the one hand we have the pillar of sound fiscal policy, and the second pillar will then be the growth component," Merkel said.

Asked whether European leaders have lost sight of the European project, she said:

"I don't believe so...The road must lead to more Europe and further integration," she said.

- Reporting by Silvia Wadhwa, Writing by Antonia van de Velde, CNBC.com