Germany's Merkel calls for budget stability in euro zone

BERLIN (Reuters) - Euro zone countries must each ensure their budgets are stable and economies competitive, Chancellor Angela Merkel said ahead of a European Union summit on Wednesday, as Italy weighs expansionary budget plans that risk EU rejection.

"In the currency union, each member state is responsible itself for its economic and budget policy," Merkel told the Bundestag lower house of parliament in Berlin.

"Each state in the euro zone is obliged to take care of stability and to take necessary reforms for its competitiveness," she added.

(Reporting by Madeline Chambers; Writing by Paul Carrel; Editing by Michelle Martin)