'No cause to fret' says Berlin as EU scrambles over debt

3rd August 2011, Comments 0 comments

Germany said on Wednesday that there was no need to fret as other eurozone countries rushed to dampen pressure on Italian and Spanish debt bonds.

"There is no reason to fret," German government spokesman Christoph Steegmans told a regular news conference when asked about the latest threat of debt contagion across the eurozone.

The priority for Germany is to see Greece implement recently agreed reforms, he said.

A finance ministry spokesman also sought to play down turmoil on the markets.

"Because of the summer (holiday) season trading is at a low level," he told the conference, adding that because of this, "market mouvements are amplified".

He said: "We believe that reforms (put in place by Italy and Spain) will convince the markets."

Meanwhile, Italian Finance Minister Giulio Tremonti held emergency talks in Luxembourg with eurozone chief Jean-Claude Juncker, after his country -- the world's eighth-biggest economy -- took a hammering on bond markets.

And Spanish Prime Minister Jose Luis Rodriguez Zapatero cut short a family holiday to return to Madrid for talks with his Finance Minister Elena Salgado after the debt risk premium for Spain, the eurozone's fourth-biggest economy, again soared to a record high level.

© 2011 AFP

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