France says troubled euro has 'turned the corner'

29th January 2011, Comments 0 comments

The beleaguered eurozone has put the worst of its debt crisis behind it, France's finance minister told global elites at Davos Saturday, as Germany vowed to defend the stability of the euro.

Christine Lagarde said the success of Tuesday's landmark five-year bond auction worth five billion euros ($6.8 billion) to raise funds for Ireland and help calm financial markets had boosted confidence in the 17-member bloc.

The bond "was oversubscribed nine times. That's an indication that on the market of confidence, the eurozone has turned the corner," Lagarde said, on a panel that also boasted German Finance Minister Wolfgang Schaeuble.

"Let's not short Europe and let's not short the eurozone," she said to applause from the business and political leaders attending the annual meeting of the World Economic Forum in this Swiss ski resort.

Schaeuble said the health of the eurozone was not as bad as in some other parts of the world, with his economy, Europe's largest, predicted to expand by between 2.2 and 2.3 percent.

"We are ready and we are able to defend the stability of the euro," said the minister.

The comments followed strong commitments to the euro from the leaders of France and Germany that, along with a calmer market situation, has dispelled some of the gloom surrounding the zone.

Earlier in the meeting of some of the world's most influential policymakers, French President Nicolas Sarkozy pledged that Paris and Berlin would "never abandon the euro."

And Chancellor Angela Merkel denied the euro as a currency was in crisis and promised solidarity with some of the eurozone's debt-wracked countries, such as Greece, Ireland and Portugal.

© 2011 AFP

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