French minister: Europe 'determined' to defend euro

1st December 2010, Comments 0 comments

France's Finance Minister Christine Lagarde said on Wednesday that European states are determined both to defend the euro and to reassure markets over their planned permanent bail-out fund.

"The Europeans -- and I think we demonstrated this well on Sunday by day and by night -- are obviously united, determined and engaged in defending their currency and their single monetary zone," Lagarde told reporters.

On Sunday, EU finance ministers agreed an emergency loan package to see Ireland through its debt crisis and on a permanent bail-out mechanism to protect other eurozone economies against future shocks.

Some bondholders are nervous of this fund, fearing it will seek to transfer some of the risk of government sector debt to commercial lenders.

"We will have to explain and to re-explain as often as needed that it is simply a way of putting in order a mechanism entirely analogous with a mechanism of the International Monetary Fund type," she said.

"It's not a threat, but a means of managing crisis situations."

© 2010 AFP

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