If euro fails, Europe will fail: German Chancellor Merkel

Prakash Chawla

Davos, Jan 29 (PTI) Asserting that Germany will defendthe European Union currency, German Chancellor Angela Merkelhas said that if euro fails, Europe will fail.

"Let me say this very clearly again. The euro is ourcurrency. And it is much more than just a currency. It is theembodiment of Europe today. Should the euro fail, Europe willfail", she said while addressing the 41st annual meeting ofthe World Economic Forum.

"We are going to defend the euro," the German Chancellorsaid while regretting that the world has not yet been able toput in place necessary mechanisms to prevent another globalfinancial crisis.

While Germany stands firmly behind euro, Merkel saidthat currency markets needed to be convinced that Europe wastaking all the necessary steps to tackle its debt problems.

The international community was able to "prevent theworst" following the global financial crisis, the Chancellordeclared.

"But can we safely say that we can prevent furthercrises from happening? Do we have the necessary mechanisms inplace to ensure sustainable growth globally? We have laid downthe groundwork, but we are not there yet. What we have done isnot yet sufficient," she warned.

Merkel apprehended that the risk is that, now that thecrisis is no longer dominating newspaper headlines, theinternational community, including the G20, will lose anysense of urgency.

"That is the danger. We still have an enormous job todo," she said.

The international community was able to "prevent theworst" following the global financial crisis, she declared.

"But can we safely say that we can prevent further crisesfrom happening? Do we have the necessary mechanisms in placeto ensure sustainable growth globally?," she asked.

According to Merkel, the French presidency of the G20marks the transition from crisis mode to a stage where theworld needs to learn to work together. There are threeprincipal areas on which this work should focus.

"We need to look at currencies. Exchange rates mustreflect the fundamental data of individual countries," theChancellor declared.

The second point is free trade.

"The conclusion of the Doha Round is of utmostimportance. We are, literally, metres away from the finishingline. But if we do not reach it, then decades will go bywithout this opportunity offering itself again," she warned.

Finally, volatile commodity prices are hurting buyers andsellers. "We need to set up a more transparent system. Therehas to be fair access to commodities," she affirmed.