Economy

If euro fails, Europe will fail: Merkel

PTI Davos | Updated on January 29, 2011 Published on January 29, 2011

Asserting that Germany will defend the European Union currency, German Chancellor Ms Angela Merkel has said that if euro fails, Europe will fail.

“Let me say this very clearly again. The euro is our currency. And it is much more than just a currency. It is the embodiment of Europe today. Should the euro fail, Europe will fail”, she said while addressing the 41st annual meeting of the World Economic Forum.

“We are going to defend the euro,” the German Chancellor said while regretting that the world has not yet been able to put in place necessary mechanisms to prevent another global financial crisis.

While Germany stands firmly behind euro, Ms Merkel said that currency markets needed to be convinced that Europe was taking all the necessary steps to tackle its debt problems.

The international community was able to “prevent the worst” following the global financial crisis, the Chancellor declared.

“But can we safely say that we can prevent further crises from happening? Do we have the necessary mechanisms in place to ensure sustainable growth globally? We have laid down the groundwork, but we are not there yet. What we have done is not yet sufficient,” she warned.

Ms Merkel apprehended that the risk is that, now that the crisis is no longer dominating newspaper headlines, the international community, including the G20, will lose any sense of urgency.

“That is the danger. We still have an enormous job to do,” she said. The international community was able to “prevent the worst” following the global financial crisis, she declared.

“But can we safely say that we can prevent further crises from happening? Do we have the necessary mechanisms in place to ensure sustainable growth globally?” she asked.

According to Ms Merkel, the French presidency of the G20 marks the transition from crisis mode to a stage where the world needs to learn to work together. There are three principal areas on which this work should focus.

“We need to look at currencies. Exchange rates must reflect the fundamental data of individual countries,” the Chancellor declared. The second point is free trade. “The conclusion of the Doha Round is of utmost importance. We are, literally, metres away from the finishing line. But if we do not reach it, then decades will go by without this opportunity offering itself again,” she warned.

Finally, volatile commodity prices are hurting buyers and sellers. “We need to set up a more transparent system. There has to be fair access to commodities,” she affirmed.

Published on January 29, 2011
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