Eurozone in 'very difficult phase': Berlin

10th October 2011, Comments 0 comments

The eurozone is now in a particularly trying period, Germany said Monday, adding that a Franco-German accord on solving the euro's problems aimed to stop the debt crisis spilling over into the economy.

"Germany and France are aware of their responsibilities in this extremely difficult phase of the European debt crisis," Chancellor Angela Merkel's spokesman told a regular briefing.

"They are especially aware of their responsibility to prevent -- or at least mitigate -- a contagion into the real economy by taking the appropriate action," Steffen Seibert added.

After a pivotal meeting between Merkel and French President Nicolas Sarkozy late Sunday, Seibert said that officials from both countries were now working on fleshing out the details of a comprehensive plan by the end of the month.

The plan would focus on four areas, Seibert said: recapitalising banks; defining the way the European bailout fund should work; supporting the work of international auditors in Greece and toughening the EU's rules on debt.

Seibert stressed that such work would remain "confidential" and resisted reporters' efforts to draw him out on the details.

"Time is pressing. Until the Franco-German proposals are on the table, I would like to let the experts work," said Seibert.

"Everything that Germany and France is working on aims to shore up the stability of the euro, which has a very direct influence on the prosperity and future of the European people," he added.

At a hotly anticipated summit in Berlin on Sunday, Sarkozy vowed "lasting, global and quick responses before the end of the month" to the euro crisis, but without announcing concrete details.

Europe must "arrive at the G20 united and with the problems resolved", he said, referring to a November 3 and 4 meeting of the world's advanced and emerging economies in the French Riviera resort of Cannes.

© 2011 AFP

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