New anchor for euro stability vital -Germany’s Merkel

By Andreas Rinke and Thorsten Severin

KARLSRUHE, Germany, Nov 15 (BestGrowthStock) – Europe must see off
risks to the euro and establish a new anchor for financial and
economic stability in the euro zone, Chancellor Angela Merkel
told a German conservative party congress on Monday.

Merkel, speaking to a rally of her Christian Democratic
Union (CDU) in the southwestern town of Karlsruhe, said it was
essential that the European Union work together to prevent any
further crises of confidence like that in Greece.

She was speaking as pressure grew on Ireland to agree on an
EU bailout to halt a debt market sell-off and its spread to
other European government borrowers.

“Everything is at stake — if the euro fails, then Europe
will fail,” Merkel told delegates at the CDU congress.

“The idea of European values and unity will have failed, an
idea that gave our continent strength and prosperity after the
last century with its wars and destruction. It’s up to us. It’s
our task to create a new anchor for a culture of stability in
Europe,” said the chancellor.

Merkel, trying to boost her party’s slumping fortunes, did
not go into detail about plans for a new euro stability pact nor
did she mention Ireland in particular. [ID:nLDE68T0MG]

Berlin’s push for states to agree on a mechanism that would
allow Europe to deal with future debt crises and potentially
have the private sector share the cost of a debt restructuring
have added to worries for European bond investors.

“We’ve got to prepare for the future so that a crisis won’t
ever happen again,” she said in her 75-minute address.

Greek Prime Minister George Papandreou said Germany’s tough
stance on banks and bond markets sharing the pain of any default
could force some economies toward bankruptcy and had pushed up
interest rates for Ireland and Portugal.

“This could create a self-fulfilling prophecy … This could
break backs. This could force economies towards bankruptcy,”
said Papandreou during a visit to Paris. [ID:nPISFME6FP]

Merkel attacked her predecessor, Social Democrat Chancellor
Gerhard Schroeder and his Finance Minister Hans Eichel, for
allowing Greece into the euro zone. The SPD, now in opposition,
acted irresponsibly, she said.

“In 2000 Schroeder and Eichel couldn’t let Greece join the
euro fast enough and they ignored all the warnings,” Merkel
said. “It was a political decision … political decisions are
important but those which ignore the facts are irresponsible.”

She also said Germany, one of the world’s leading export
nations, would not accept being punished for its successes.

Merkel was referring to pressure from the United States for
Germany to reduce its trade and current account surplus and
stimulate domestic demand to help global economic recovery.

“We will not allow ourselves to be punished for something
that we do well,” Merkel said. “We’ll not allow ourselves to be
whipped because we export good products, made in Germany, all
around the world.”

(Writing by Erik Kirschbaum; editing by Patrick Graham)

New anchor for euro stability vital -Germany’s Merkel