Germany Pledges to Stabilize Euro
Friday, May 21, 2010
German Chancellor Angela Merkel has convinced her Parliament to pass a bill that promises a huge sum of money in a stabilization package for the weakened euro currency.
Germany's share of the safety net could reach $183 billion, the largest amount of any European country. Despite widespread unpopularity among German citizens, Merkel said the move was necessary to protect the country's economy.
Britain's new prime minister, David Cameron, who made his first visit to Germany this week, agreed that a stable euro is in the interest of all Europeans - even nonmembers - but disagreed with Merkel on how much regulation the markets can stand.
In particular, Cameron disliked Germany's decision on Tuesday to ban naked short-selling of euro bonds, which have been accused of destabilizing the market. The British prime minister said he saw the naked short-selling as a symptom of a weak economy rather than a cause of it.
"It seems to me that the cause of many of our problems in the European economies is excessive debt, excessive deficits, financial systems that haven't worked, banking systems that have ground our economies down," Cameron said.
Merkel defended the move as important to Germany as an effort to prod Brussels into passing more strict European-wide guidelines.