Europe has 'political will' on debt crisis: Merkel

11th October 2011, Comments 0 comments

Europe has the "political will" to combat its debt crisis, German Chancellor Angela Merkel said in Vietnam on Tuesday, amid fears for the continent's banking sector and the wider global economy.

Merkel arrived in Hanoi fresh from weekend talks where she and French President Nicolas Sarkozy held a pivotal meeting aimed at calming Europe's economic storm.

Eurozone members "have the political will to overcome this public debt crisis", she told reporters after discussions with Vietnamese Prime Minister Nguyen Tan Dung, according to a translation of her remarks confirmed by the German embassy in Hanoi.

The eurozone drama has sent shivers across the world over concerns it could trigger a new global recession. US President Barack Obama has called on Europeans to act fast to stem the crisis.

After the talks with Merkel in Berlin on Sunday, Sarkozy promised "lasting, global and quick responses before the end of the month."

Global markets responded with relief after the two leaders insisted they were united on the goal of stabilising the eurozone.

Germany said Monday the plan would focus on four areas: recapitalising banks; defining the way the European bailout fund should work; supporting the work of international auditors in Greece and toughening the EU's rules on debt.

Eurozone leaders agreed in July to provide Greece with a second bailout and expand the powers of their rescue fund, in order to ringfence the 17-nation single currency from future shocks.

The new Greek rescue package has yet to be implemented and Athens is now hoping to secure a bigger debt write-down from banks.

After bailouts of Greece, Ireland and Portugal, the debt crisis claimed its first bank on Monday when France, Belgium and Luxembourg decided to dismantle Franco-Belgian lender Dexia.

British Prime Minister David Cameron on Monday warned "time was short" for Europe's leaders as they scramble to solve the debt problem.

In Hanoi, Merkel said Europe's ageing population makes it more difficult to reduce public debt.

"The chancellor told me that this is a difficult issue but we believe that the euro will exist and develop, although there are still difficulties," Dung said at the same news conference.

Ahead of the visit, Merkel, who is accompanied by business leaders eyeing investment opportunities, stressed the need to boost ties with Vietnam and Mongolia, her next port of call.

According to a senior government source in Berlin, Merkel planned to push a free-trade accord between the European Union and Vietnam.

A diplomatic source, speaking ahead of the German leader's visit, said there were hopes a first round of negotiations on the deal could start "in the next few months."

Merkel and Dung signed a statement on working towards a "strategic partnership" which would deepen cooperation between their two nations. Germany is already Vietnam's largest trade partner in Europe.

The Asian nation is facing its own economic turmoil, grappling with the region's highest inflation, dwindling foreign reserves, a weakening currency and a trade deficit.

Merkel has said economic cooperation is tied to complying with rights standards and insisted she would not shy away from tackling what Berlin sees as a "deficit" in Vietnam's human rights record.

The European Union has frequently chided Vietnam for its record on freedom of expression and in August called for the release of a French-Vietnamese blogger, Pham Minh Hoang.

Merkel is to travel on Wednesday to Vietnam's commercial capital, Ho Chi Minh City, before departing for Mongolia later in the day.

© 2011 AFP

0 Comments To This Article