Europe's elite ride to euro's defence

27th January 2011, Comments 0 comments

European leaders Thursday rushed to defend the embattled euro, with France's Nicolas Sarkozy declaring he would never let it fail and Europe's top central banker denying there was a crisis.

Addressing political and business elites at the World Economic Forum at the Swiss ski resort of Davos, President Sarkozy said both he and German Chancellor Angela Merkel were firm in their commitment to the European single currency.

"Whether it be Chancellor Merkel or myself, never, never will we turn our backs on the euro. We will never abandon the euro, we will never drop the euro," Sarkozy told participants.

The euro was more than an economic project, the French president said, being fundamental to the region's identity.

"The euro spells Europe. The euro is Europe and Europe has spelled 60 years of peace on our continent, therefore we will never let the euro go nor let it be destroyed," he said.

And he warned off those who speculate against the currency. "For those of you who want to bet against the euro, be careful how you invest. We are determined to ensure the strength of the euro," he said.

On a separate panel, European Central Bank President Jean-Claude Trichet said: "There is no crisis of the euro currency."

Debt problems affect certain countries within the 17-nation zone, admitted Trichet, but the issues confronting the eurozone as a whole are no more serious than those faced by other major economies such as Japan or the US.

However, Trichet called for improved international oversight and "good individual behaviour" from member states.

Eurozone countries have been battling to prevent a debt crisis from spreading from Greece and Ireland to Portugal and other economies in the bloc.

Heavily indebted Greece was forced to seek help last year from the European Union and International Monetary Fund to avoid a default that many feared could have sunk the decade-old common currency project.

Greek Prime Minister Georges Papandreou told the Davos meeting his country was not about to restructure its debt and had taken the necessary measures to contain the crisis and return to growth.

"I can also say we are not moving to restructuring. We have a very clear path, a roadmap to move out of the debt problem," he said.

"We are on a path, we think, that we can get to growth in 2012 and restore confidence and we are hoping to open up to the markets even this year. We are doing what we should."

Reflecting an increased bullishness on the euro after a successful bond auction on Tuesday to raise cash for its bailout fund, industry leaders also talked up the common currency.

Maurice Levy, chief executive of French advertising giant Publicis, said: "I think the European system ... has worked pretty well. It has proven to be resistant to this type of crisis.

"If you look back to what would have happened in Europe if we had not had the euro, if we had not had the EU and the co-ordination that happened recently, I think we would have been through a terrible crisis," he added.

"Greece would have gone bankrupt. They would not have been able to pay their debt, same for Ireland."

Eckhart Cordes, chief executive of German retail group Metro, also pointed out that his country, Europe's top economy, had "significantly benefited from the euro.

"Had we not had the euro, we would have seen a significant appreciation of the German deutschmark, which has not happened," he said, referring to fears that a strong currency would hit exports, the key driver of Germany's economy.

James Dimon, chairman and chief executive of US investment bank JP Morgan, praised the European Union as "one of the greatest human endeavours of all time."

But the more cautiously optimistic mood did not encourage Europe's biggest non-euro country to jump on board.

Asked whether Britain should join the euro, deputy Prime Minister Nick Clegg, previously one of the main cheerleaders for entry, said he would "not now" advocate London scrapping the pound.

© 2011 AFP

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