A draft version of Europe 2020 seen by EurActiv indicated that the Commission wants to introduce so-called "country surveillance" schemes and link fiscal stabilisation programmes to expenditure in growth-friendly areas such as R&D and education.
The EU executive's draft sets member states specific goals like raising the employment rate of the population aged 20-64 "from the current 69% to at least 75%" and increasing R&D investment "from the current 1.9% of EU GDP to 3%" (see EurActiv 24/02/10 for the full list of targets).
"To achieve this, the Europe 2020 and Stability and Growth Pact reporting and evaluation will be done simultaneously to bring the means and the aims together," the Commission says.
But Germany fears that closely linking achieving the strategy's economic targets to compliance with the requirements of the Stability and Growth Pact would make fiscal surveillance "unnecessarily political," says Merkel in her letter, seen by the Financial Times Deutschland.
The German chancellor expressed scepticism about setting individual countries specific targets, saying she would only sign up to this if governments were able to directly influence their achievement and if they were attainable within a few years.
Asserting that EU countries have become more interdependent, "particularly in the euro zone," the Commission points to recent events in Greece as proof that "reforms, or the lack of them, in one country affect the performance of all others" (EurActiv 17/02/10).
Germany is Europe's biggest economy and as such would be expected to contribute heavily to support packages for other eurozone members in dire financial straits.
But Chancellor Merkel faces strong domestic opposition to any Greek bailout amid fears that such help would set the precedent that Germany will take on the liabilities of poorer states experiencing difficulties.
Behind Merkel's Europe 2020 protest lies the fear that member states' compliance with the terms of the Stability and Growth could be put at risk on the pretext of boosting growth, the FT Deutschland writes.