UPDATE 1-Germany’s Merkel lashes out against speculators

* Merkel against speculation on high deficit countries in EMU

* Says “speculators are our adversaries”

* Says resolved to win battle against markets

* Renews calls for regulation of hedge funds

(Adds quotes, background)

By Sabine Siebold

BERLIN, May 6 (BestGrowthStock) – Financial markets are exaggerating
tensions in the euro zone and need to be brought under control,
German Chancellor Angela Merkel said on Thursday.

Merkel said politicians are resolved to fight speculation
against euro zone members with higher budget deficits, adding
that she intended to win the struggle.

“To some degree this is a battle between the politicians and
the markets,” she said in a speech in Berlin. “But I am firmly
resolved — and I think all of my colleagues are too — to win
this battle.”

The euro tumbled to a 14-month low against the dollar on
Thursday, reeling from mounting concern that Greece’s debt
crisis may spread to other euro zone states.

Euro zone countries and the IMF are ready to lend Greece 110
billion euros ($148 billion) over the next three years to help
it finance itself while overhauling its bloated public finances.

But markets doubt Greece is determined enough to see through
huge budget deficit cuts. Three people were killed in a fire in
central Athens on Wednesday after protesters marching against
austerity measures threw petrol bombs into a local bank branch.

Turning to hedge funds, long a target of Merkel’s ire, the
German chancellor said oversight rules would soon be in place.

“The fact that hedge funds are not regulated is a scandal,”
she said, adding that Britain had blocked previous efforts to do
this. “However, this will certainly have taken place in Europe
in three weeks,” she said, without giving more details.

Speculation against Portugal was exaggerated, Merkel added,
saying that it was time to give European Union institutions
greater scope to look into national budgets.

Merkel also said she would support an IMF proposal to raise
a levy on bank profits and bonuses.

Investment Advice
(Writing by Dave Graham and Brian Rohan; editing by Mark
Trevelyan)

UPDATE 1-Germany’s Merkel lashes out against speculators