Merkel supports European Monetary Fund to bolster euro zone stability

German Chancellor Angela Merkel endorsed the idea of a European Monetary Fund on Tuesday and said she could imagine creating a combined European finance and economy minister, signalling a willingness to deepen euro zone integration.

Speaking to reporters ahead of a Sept. 24 election, Merkel addressed a wide range of issues in good humour two days after her main challenger, Social Democrat Martin Schulz, accused her of being aloof and out of touch with voters.

In power since 2005, the conservative chancellor, 63, is comfortably on course to win re-election and indicated she was ready to press ahead with the deeper euro zone integration that France's new president, Emmanuel Macron, also wants to pursue.

Merkel said she supported a "very good idea" from her finance minister, Wolfgang Schaeuble, to turn the euro zone's rescue fund, the European Stability Mechanism (ESM), into a European Monetary Fund.