Sarkozy: 'Merkel and I will never let the euro fail'

27th January 2011, Comments 0 comments

France's President Nicolas Sarkozy dismissed speculation against the euro Thursday, declaring that he and Germany's Chancellor Angela Merkel would never allow the currency to fail.

"Whether it be Chancellor Merkel or myself, never, never will we turn our backs on the euro. We will never abandon the euro, we will never drop the euro," Sarkozy insisted at the World Economic Forum in Davos.

In his address to world elites gathered in the Swiss alpine village, the French president outlined how important the euro was to the identity of the region.

"The euro spells Europe. The euro is Europe and Europe has spelled 60 years of peace on our continent, therefore we will never let the euro go or be destroyed," he insisted.

"For us, it's not simply an economic issue, it has to do with our identity as Europeans. For those of you who want to bet against the euro, be careful how you invest. We are determined to ensure the strength of the euro.

"It is of such importance that we will be there whenever it needs to be defended. The consequences of it failing would be so cataclysmic that we could never entertain the idea," he declared.

The head of the European Central Bank Jean-Claude Trichet also insisted in a separate session that Europe's common currency is not in crisis. However, he noted that greater surveillance is necessary.

"There is no crisis of the euro currency," Trichet said.

Individual countries in the European Union may have debt problems, but the eurozone itself is sound, he stressed.

However, the central banker pointed out that two elements were key for the health of the eurozone -- "good individual behaviour" and surveillance, which "has to be improved."

Eurozone countries have been battling to prevent a debt crisis from spreading from Greece, Ireland and Portugal to other economies in the bloc.

Heavily indebted Greece was forced to seek help last year from the European Union to avoid a default that many feared would have sunk the common currency project.

Ireland was forced into a similar appeal for help late last year after the financial markets turned against it, preventing Dublin from raising fresh funds at sustainable interest rates.

But if the market remained lukewarm about the prospects of the currency, at Davos on Thursday, industry leaders talked up the common currency.

Maurice Levy, chief executive of French advertising giant Publicis, said: "I think the European system... has worked pretty well. It has proven to be resistant to this type of crisis."

"If you look back to what would have happened in Europe if we had not had the euro, if we had not had the EU and the co-ordination that happened recently, I think we would have been through a terrible crisis," he added.

"Greece would have gone bankrupt. They would not have been able to pay their debt, same for Ireland."

Eckhart Cordes, chief executive of German retail group Metro, also pointed out that his country, Europe's top economy, had "significantly benefited from the euro.

"Had we not had the euro, we would have seen a significant appreciation of the German deutschmark, which has not happened," he said.

James Dimon, chairman and chief executive of US investment bank JP Morgan also praised the European Union as "one of the greatest human endeavours of all time."

However, he acknowledged that disparities between eurozone countries made a coordinated resolution of the sovereign debt crisis difficult.

And generous social provisions in some European countries were part of the problem, he said.

© 2011 AFP

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