Euro-zone countries in need of structural reforms should make use of the flexibility that existing European budget rules offer to help achieve sustainable economic growth, Chancellor Angela Merkel said Wednesday.

Germany is one of Europe’s main advocates of applying strict budget rules, known as the European Stability and Growth Pact, and has been criticized from debt-ridden countries such as France and Italy for emphasizing austerity more than the need to boost the economy and employment.

Ms. Merkel has faced criticism at home too, with German Vice-chancellor Sigmar Gabriel supporting calls from Paris and Rome to give them more leeway for boosting economic growth and reducing unemployment.

The chancellor rejected the criticism, saying the German government agrees that the pact “allows for the necessary flexibility” to enable growth-friendly fiscal consolidation.

“The government agrees that the Stability and Growth Pact offers outstanding conditions with clear guard rails and limits on the one side and a number of flexibility instruments on the other side,” Ms. Merkel told the lower house of parliament. “We must use both, just as they have been used in the past too.”

Ms. Merkel warned that the euro-zone crisis hasn’t been overcome for good yet and the situation remains fragile. “It’s still important that structural reforms are being tackled in some member states,” she said. “They are the backbone of a lasting upswing.”