Germany's Merkel leaves crisis-hit eurozone for Asia

11th October 2011, Comments 0 comments

German Chancellor Angela Merkel arrived in Vietnam on Tuesday, leaving behind the debt crisis raging in the eurozone to push a free trade deal and press the communist nation on human rights.

The trip, which will also take her to Mongolia, comes shortly after Merkel vowed with French President Nicolas Sarkozy a response within weeks to the economic storm which has raised fears for Europe's banking sector.

Ahead of the four-day visit, Merkel, who is accompanied by top business leaders eyeing investment opportunities, stressed the need to boost ties between the two fast-growing Asian nations and Europe's top economy.

"Vietnam is an emerging country in Asia, has enjoyed fast-paced economic growth in recent years and is increasingly becoming a competitor for large nations like China," Merkel said in her regular weekend podcast.

A senior government source in Berlin said Merkel would push a free-trade accord between the European Union and Vietnam, adding that Germany "is a very strong supporter" of such a deal.

Her trip comes after she and Sarkozy provided welcome relief to global markets by insisting they were united on plans to shore up eurozone lenders in the face of a debt crisis which has pushed Greece to the brink of bankruptcy.

The announcement came a few weeks ahead of a key G20 summit in Cannes.

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

British Prime Minister David Cameron on Monday warned "time was short" for Europe's leaders trying to solve the crisis that has forced a huge bailout of Franco-Belgian lender Dexia, the first bank to fall in Europe's debt crisis.

The German leader is arriving in a country beset by its own severe economic troubles.

Long focused on growth, Vietnam in February shifted its attention to stabilising an economy beset by Asia's highest inflation, dwindling foreign reserves, a weakening currency and a trade deficit.

Foreign investors have reported declining business confidence this year, while official media report that new investments are down about one third from 2010, and thousands of local firms have shut down because of a credit squeeze.

The European Union announced in March last year that it would start negotiating a free trade pact with Vietnam.

Germany is the Asian nation's largest trade partner in Europe, buying Vietnamese exports worth $1.8 billion in the first seven months of this year, against imports of $1.1 billion, the Vietnam News Agency reported.

Merkel insisted she would not shy away from tackling what Berlin sees as a "deficit" in Vietnam's human rights record.

Economic cooperation "is of course tied to complying with human rights. And I will of course raise such questions when I am there," Merkel said.

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.

Vietnamese foreign ministry spokesman Luong Thanh Nghi said Merkel is expected to hold talks with Prime Minister Nguyen Tan Dung during the visit which "aims at promoting the comprehensive cooperation between Vietnam and Germany in all areas".

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

It will be the first visit by a German leader to Mongolia since the two countries established diplomatic relations.

"Mongolia is a country very rich in raw materials and we have a very, very good chance to improve our cooperation in this field," Merkel said.

© 2011 AFP

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