25 Nov 2010

Private investors should pay for European bailouts - Merkel

9:48 am on 25 November 2010

German Chancellor Angela Merkel has again suggested that private investors, not just taxpayers, should help pay for any future European bailouts.

She told a session of the lower house of parliament on Wednesday that those who earn the money should share the risks as well.

"Have politicians got the courage to make those who earn money share in the risk as well?'" she said. "Or is dealing in government debt the only business in the world economy that involves no risk?"

"This is about the primacy of politics, this is about the limits of the markets," Ms Merkel said.

The Chancellor sparked fresh selling of the euro on Tuesday by saying it was in an "exceptionally serious" situation.

She has repeatedly said private investors must be involved in a new euro zone crisis mechanism for the euro zone to take effect from mid-2013, when the current mechanism lapses.