Merkel vows 'sufficient' euro crisis fund

17th December 2010, Comments 0 comments

German Chancellor Angela Merkel vowed Friday that Europe would provide enough resources for a new debt crisis fund aimed at bringing long-lasting stability to the euro.

Merkel spoke the day after European leaders agreed at a summit in Brussels to set up a permanent financial stability mechanism to shore up the single currency amid fears Portugal and Spain could need bailouts following Irish and Greek rescues.

The amount of the new fund was not decided. Germany and other nations have resisted pressure to boost an existing 750-billion-euro (one-trillion-dollar) EU-IMF backstop which expires in 2013 and will be replaced by the permanent mechanism.

"We will finalise the details of this crisis mechanism by March and, naturally, it must have sufficient" resources to face future debt shocks, Merkel told reporters ahead of the summit's second day.

"We will do everything to make the euro safe," she said.

After a year marked by market upheaval over the shaky finances of weak eurozone nations, the German leader called for closer economic coordination.

"Yesterday's debates showed that we need to have more points in common in our economic policies and we will have to talk about this in the coming months, particularly within the eurozone," Merkel added.

"In the eurozone, it is important to have stable budgets, stable finances. But it is just as important for us to develop, step by step, and this is a long process, a common economic policy," she said.

"The most important thing in this summit was that everybody clearly stated that the euro is our common currency and that it is in our common interest to have a strong and stable euro."

© 2010 AFP

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