Merkel blasts 'treacherous' banks in Greek crisis

Merkel, whose Christian Democrats face a tough re-election battle in Germany's most populous state Sunday, railed against gamblers on the financial markets who she said were exacerbating an already volatile situation.

"First the banks failed, forcing states to carry out rescue operations. They plunged the global economy over the precipice and we had to initiate recovery packages. Because of these packages, we have become indebted and now, they are speculating against these debts -- that is really very treacherous," she said.

"Governments must regain their supremacy over the markets, which they no longer have, and for that we need much stricter global rules," she added, at a debate on Europe organised by a public broadcaster.

Merkel said it was now up to the European Union member states to reassert their authority and shore up the financial rules governing the bloc.

"We must clearly demonstrate that in Europe we have the political power, each in his own country, of getting back on the track of the Stability and Growth Pact," she said.