11 Dec 2010

Euro defended by France and Germany

6:23 am on 11 December 2010

French and German leaders have strongly defended the troubled single currency at talks ahead of an EU summit on the eurozone debt crisis.

President Nicolas Sarkozy said France was "deeply attached" to the euro while Chancellor Angela Merkel of Germany said that if the euro failed, "Europe fails".

Meeting in the German city of Freiburg, they repeated their opposition to a proposal for joint eurozone bonds.

Mrs Merkel also opposed increasing the existing euro rescue mechanism.

"I'd say for us in Germany that the question of expanding the rescue mechanism is not now on the table," she said after the bilateral summit with Mr Sarkozy.

"Less than 10% of the rescue mechanism has been used for [assisting the Republic of] Ireland. It is not on the agenda."

She said that setting up a permanent mechanism for future eurozone crises would be the best way of showing the single currency was being defended.

"The EU summit (next week) should give a sign that we are defending the euro, which is why it is important to have a decision on the permanent crisis mechanism and treaty change," she said.

The euro would not be allowed to fail, Mrs Merkel added, because it had "a meaning that goes beyond a mere currency".

Mr Sarkozy said: "We will defend the euro, because the euro is Europe."

EU leaders will meet in Brussels next Thursday for a two-day summit dominated by the eurozone debt crisis.