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Merkel says debt biggest danger to Europe

The Local · 28 Jan 2011, 19:47

Published: 28 Jan 2011 19:47 GMT+01:00

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"Indebtedness is the biggest danger for prosperity on this continent. This is why we have to resolutely work against it," Merkel told business leaders gathered at the Davos meeting of the World Economic Forum.

The leader of Europe's biggest economy also renewed her pledge to defend the bloc's single currency, adding that "there is no doubt about this and we need to pursue a policy of euro stability."

Germany has been pushing for reforms in the eurozone, calling for indebted countries such as Greece and Ireland to reduce their borrowing and Merkel pointed to her own country as an example.

"Budget consolidation remains of prime importance to us and has not caused us any problems, quite the opposite," said Merkel.

The German economy has rebounded strongly from a deep recession to register record output last year and Merkel noted that her country, the world's second-biggest exporter after China, had also reduced its reliance on exports.

"Consumer confidence has returned to Germany and we have a strong boost to

domestic consumption," she said.

"That to me shows that sound fiscal policy and growth do not need to be a contradiction in terms," she argued.

Story continues below…

Merkel echoed earlier comments at Davos from French President Nicolas Sarkozy, who pledged that Paris and Berlin would "never abandon the euro."

"There is no crisis of the euro as such. This is essentially a debt crisis ... we now have to overcome it," she told the assembled delegates.

"If the euro fails, then Europe fails," she reiterated.


The Local (news@thelocal.de)

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Your comments about this article

20:16 January 28, 2011 by moreanon
These remarks can't be directed at Ireland because it isn't on the continent.
20:28 January 28, 2011 by HANNIBAL-BARCA
"Political language is designed to make lies sound truthful and murder respectable and to give the appearance of solidity to pure wind"

George Orwell
02:07 January 29, 2011 by provita67
The printing of money, void of fractional reserve lending, is sovereignty.
15:00 January 29, 2011 by Englishted
"If the euro fails, then Europe fails,"

Lets hope the euro fails then .

I don't mind many things but I would like a vote on them for example ,

introducing the euro and getting rid of the mark ,expantion to the east,

and a real danger of allowing Turkey in next year.
18:18 January 29, 2011 by HANNIBAL-BARCA

your statement, "The printing of money, void of fractional reserve lending, is sovereignty." is plain false.

The absence of fractional reserve lending is a necessary yet insufficient requirement in the pursuit of sovereignty.

The printing of money absent a free market, which we don't have will always lead to economic enslavement. The printing of money controlled by irresponsible governments, our system, always in every case is economic enslavement.
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