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Merkel vows not to 'abandon' euro nations

The Local · 15 Dec 2010, 13:48

Published: 15 Dec 2010 08:32 GMT+01:00
Updated: 15 Dec 2010 13:48 GMT+01:00

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"No one in Europe will be left alone, no one in Europe will be abandoned. Europe succeeds when it acts together and I would add, Europe succeeds only when it acts together," Merkel said in a speech to parliament.

Merkel said that some in the 16-nation eurozone faced an uphill task in repairing their public finances but she expressed confidence that the single currency would survive.

"It is undeniable that some eurozone countries face difficult challenges but it is also undeniable that the euro has shown itself to be crisis-proof," Merkel said.

"We should keep reminding ourselves what would have happened during the turbulence of the financial crisis if we had all had our own currencies."

Ireland last month became the second eurozone member after Greece to seek a bailout, tapping a €750-billion ($1-trillion) temporary mechanism set up by the EU and the International Monetary Fund.

There are fears that rising borrowing costs might force other countries in the eurozone, most notably Portugal and Spain, to follow suit, leading to fears in some quarters that the single currency might fall apart.

Merkel wants EU leaders this week to agree on setting up a new, permanent crisis mechanism for after 2013 that would include private investors in the costs of any future bailouts.

The German leader also wants the EU's governing treaty to be tweaked so that the crisis mechanism can operate without incurring objections from the country's constitutional court.

Berlin additionally wants Brussels to be able to keep a closer eye on member states' budgets, a sine qua non for taking on greater responsibility for their finances.

Germany and France however reject a proposal from Luxembourg and Italy for joint eurozone bonds, something which would help weaker eurozone countries borrow money more cheaply - but push up the cost for Berlin and Paris.

Earlier on Wednesday, Luxembourg’s foreign minister warned Germany and France not to act with “pride and arrogance" at an EU summit likely to focus on the eurozone crisis later this week.

In an interview with daily Die Welt Jean Asselborn said solutions must be agreed upon by all 27 member states and not dictated by just two leaders.

“I can only warn Germany and France from a claim to power that expresses a certain pride and arrogance, which disregard the fundamental European principle of solidarity,” he said.

Asselborn also criticised the behaviour of Chancellor Angela Merkel and French President Nicolas Sarkozy in the last year.

“In my opinion there were scenes this year in which France and Germany created a problem ahead of an EU summit, then came to Brussels and dramatically said, ‘We have solved the problem and fixed Europe,’” he told the paper.

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Clear decisions that calm financial markets and lay out future rescue mechanisms must be reached during the summit on Thursday and Friday, Asselborn said.

The attack on Germany and France is likely connected to the two countries’ refusal to support euro bonds.

But Asselborn said he was “fairly certain” that euro bonds would be introduced in the future to help struggling EU members get credit, and would be an attractive investment for Asian and American investors.


The Local (news@thelocal.de)

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Your comments about this article

11:49 December 15, 2010 by DinhoPilot
News after news it feels like the news just refresh themselves, and there isn't "really" anything new. When does the "crisis" end?
11:59 December 15, 2010 by twisted
The idea of a united Europe will never happen. Nationalism will always take precedence. But the Euro crisis will continue until there is a real common economic and political policy for all of the Euro lands...but I see no solution to the problem as long as nationalism continues in Europe. Which is good for the U.S. Dollar.
13:53 December 15, 2010 by LancashireLad
You said it, twisted.

I have never understood how anyone could have thought that the Euro was a good idea (granted I am not an economist). Trying to economically join such disparate cultures and, more importantly, work ethics as you find in Europe .... I think we are now seeing the results of it.
15:41 December 15, 2010 by delvek
You hit the nail on the head.

I live in Germany but travel a lot throughout ALL of Europe and it amazes me at how different the cultures are. The Euro is an economic policy yet the differences in work ethic, hours, infrastructure, expectations and pride (just to name a few) vary so greatly amongst the countries it is almost absurd to expect its success.

The crisis will never end because the West (headed up by the States) created an unrealisitic, unsustainable debt load that without MASSIVE cutbacks will continue to worsen. This national debt is further complicated by people who no longer live according to their means, another thing that cant change because people wont go back to the basics of pre-1990's.
15:50 December 15, 2010 by elboertjie
What she probably meant to say was that she will not forsake the interest of German banks in other EU countries.

Exposure to Spain

Germany - $216.6 billion

France - $201.3 billion

Great Britain - $136.5 billion

US - $172.8 billion

Exposure to Ireland

Germany - $186.4 billion

France - $77.3 billion

Great Britain - $187.5 billion

US - $108.3 billion

Spain - $17.7 billion

Exposure to Portugal

Germany - $44.3 billion

France - $48.5 billion

US - $35.6 billion

Spain - $98.3 billion

Exposure to Greece

Germany - $65.4 billion

France - $83.1 billion

US - $36.2 billion

More information here: http://bit.ly/fqwj4b
16:58 December 15, 2010 by annan1063
My husband who is a 45 year old German HATES the euro. He laments constantly that he "wants his Deutsch Marks back". His claims that the euro doesn't have near the buying power that he remembers with the D mark. He complains bitterly that the German economy is what keeps the euro afloat and from what I have read and witnessed as we travel thruout other European nations, I am inclined to agree with him.
17:40 December 15, 2010 by michael4096
The idea of a united Europe will never happen.
The same was said of a British union in the 17th century - it took a hundred years to happen.

Also said of German union in the 19th century - it took 70 years to happen.

Sometimes things take time, but 'never' is a very long time in the prediction game.
19:52 December 15, 2010 by raben
All politicians now want to save some time, what that means is that Germany will bail out every single country in Europe until it also falls. But Germany will gain some years to observe what is going on atleast.
21:08 December 15, 2010 by GermanAussier
I personally like not giving banks more money in currency exchange fees everytime I cross the border into France. I like the fact that my Euro's i earnt here are good to buy a beer in Barcelona, or a coffee in Rome. There are good aspects to the eruo
22:17 December 15, 2010 by BR549
Really, who cares??

All Governments and religions need more money! Guess what?! All governments and religons ultimately FAIL. Jeezus (no pun intended) at what point do people realize that these two never win?
00:07 December 16, 2010 by Logic Guy
Well, there is only one way Europe and the Euro can truly succeed. If countries such as Greece, Portugal and Spain were to adopt a "German-Style Approach to Business and Management, then the EU would do quite well. But if this does not happen, then eventually the EU will be forced to break-up.

01:56 December 16, 2010 by Bishopbayern
Europes golden girl knows what is best! She has germany out of recession and will always be one step ahead of the euro slackers that won't trim the fat at home.
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