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Ahead Of Summit, Merkel Urges More EU Power Over Budgets

German Chancellor Angela Merkel (left) and European Commission President Jose Manuel Barroso speak prior to a photo opportunity during a European Union summit at EU headquarters in Brussels in January.
German Chancellor Angela Merkel has said ahead of an EU summit that the European Union should have the power to veto member states' national budgets.

Merkel, addressing the lower house of parliament, or Bundestag, ahead of the gathering in Brussels, said the EU's economics commissioner should have the authority to declare a budget "invalid."

"We believe -- and I'm speaking for the entire German government -- that we could well advance on this by giving Europe real rights of intervention in national budgets where the agreed limits of the stability and growth pact have not been adhered to," Merkel said.

Merkel sounded an optimistic note ahead the summit -- the fourth this year -- saying the eurozone crisis has begun stabilizing.

"A lot of things have been achieved," she said. "In the three years of the crisis, we achieved far more in Europe than in many years before it. We can already see signs of the eurozone crisis becoming more stable."

The two-day summit is due to tackle the debt crisis and would focus on efforts to set up a banking union across the eurozone. The union would create joint bank supervision and give the European Central Bank overseeing powers.

However, Britain -- the EU's main financial hub -- as well as the other nine non-eurozone member states -- have expressed concern over voting rights in any such union.

It will be the 22nd summit held since the crisis erupted in Greece in late 2009.

Merkel reiterated before the Bundestag that she strongly advocates Greece's continued membership in the eurozone.

"I want Greece to remain in the eurozone," she said. "I don't only want that because Greece is our friend and partner in the European Union and in NATO but also because despite all difficulties, it is in the interest of Greece as well as the eurozone and the European Union as a whole."

WATCH: Greek protesters clash with police.
Clashes Erupt In Athens Amid New Mass Protests
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Meanwhile, clashes erupted in Athens between demonstrators and police amid a 24-hour general strike on October 18 -- the second in the past three weeks -- against austerity measures.

Youths pelted riot police with petrol bombs and rocks, while security forces responded with tear gas to disperse the troublemakers in the capital's central Syntagma Square.

The clashes came as thousands of people marched through the streets of Athens, Thessaloniki, and other cities against a new wave of imminent austerity cuts.

The strike paralyzed train and ferry traffic, disrupted flights, and shut down public services.

Greece, mired in its worst downturn since World War II, is preparing 11.5 billion euros ($15.1 billion) of cuts to meet the requirements of the "troika" of lenders -- the European Commission, European Central Bank, and IMF -- and secure the next installment of its 130 billion-euro ($170 billion) bailout.

With reporting by AFP, Reuters, and AP
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