Tags: Germany | Euro

German Finance Minister: Don't Bet Against Euro

Monday, 13 Dec 2010 07:51 AM

 

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Europe's single currency is here to stay and those who bet against its survival are making a mistake, German Finance Minister Wolfgang Schaeuble said.

In an interview to appear on Sunday in Bild am Sonntag newspaper, Schaeuble said leaders of all the countries that share the currency agreed — the euro worked toward their common good and a return to national money would be a mistake.

"Those who bet their money against the euro will have no success ... the euro will not fail," Schaeuble said. "The euro benefits us all and we will defend it successfully."

European leaders meet next week to discuss ways to solve a eurozone debt crisis which has triggered bailouts for Greece and Ireland and which analysts say could engulf other countries. They are expected to agree the terms of a permanent rescue mechanism for the bloc.

Germany and France have pledged to better align their tax and labor policies to foster convergence in the eurozone, but have rejected calls for an increase in the bloc's rescue fund and joint sovereign bonds.

Pressure on high-deficit euro members eased slightly over the past week after the European Central Bank bought government bonds in a thin end-of-year market, pushing down the borrowing costs of countries on Europe's southern periphery.

In the newspaper interview, Schaeuble said that an exit from the eurozone by such states on the periphery is not an option.

"If even a smaller country were to drop out, the consequences would be incalculable. I think of the Lehman bankruptcy when I say this: we must not make the same mistake twice."

Berlin has opposed calls by Spain and other countries to move towards a full-fledged "fiscal union" in the 16-nation bloc but appeared on Friday to have agreed to a limited form of policy coordination.

In a separate interview appearing in the Wall Street Journal newspaper, Schaeuble said recent events could help bring the bloc together, though he offered little detail as to how.

"Sometimes it takes crises so that Europe moves forward," he said. "In this crisis, Europe will find steps toward further unification."

© 2014 Thomson/Reuters. All rights reserved.

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