Merkel seeks to calm markets on eurozone

25th November 2010, Comments 0 comments

Chancellor Angela Merkel sought to calm high tension on eurozone markets on Thursday, saying stability in the 16-nation single currency area had improved and that no member was in danger of having to restructure its debt.

She made clear that a proposal for investors to shoulder part of the costs of national bailouts would apply only after an existing rescue scheme expired in 2013, addressing critical uncertainty behind market turmoil.

"There is a high degree of nervousness in the markets, and therefore I would like to make very clear here what I have often said," Merkel said in a speech in Berlin.

Merkel stressed that her proposals would not apply for bonds already issued, but for those sold after the eurozone had agreed on a permanent rescue mechanism after 2013.

"We are not talking about changing the current crisis mechanism that expires in 2013. Everything will stay as agreed. What we are talking about is a crisis mechanism for the future," Merkel said.

"It is about what to do in the case of a country needing crisis mechanism at some time for bonds sold after 2013 ... I see today absolutely no case of a eurozone country in such a situation."

With Ireland on Sunday becoming the second eurozone country in six months to seek help from the European Union and the International Monetary Fund after Greece, recent comments from Germany have deeply unsettled markets.

Finance Minister Wolfgang Schaeuble said this week that the future of the euro was "at stake."

Merkel also said on Thursday that eurozone countries had made good progress in bringing their deficits under control since the Greek crisis.

"I am more confident than in the spring that the eurozone will make it out of the current turbulence."

© 2010 AFP

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