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Europe
Sarkozy vows to protect the euro
French president tells Davos forum he and Germany will not let the euro fail amid concern over the currency's future.
Last Modified: 27 Jan 2011 15:32 GMT
Thursday's events were briefly disrupted by a small explosion at a hotel near the Davos conference [Reuters]

The French president has said he and his European partners will "never turn our back on the euro" as concerns continue over the shared currency's future.

Nicolas Sarkozy's remarks come as debt crises in a number of European countries including Greece, Ireland and Spain have led world leaders and investors to worry over the long-term viability of the euro.

"Whether it be [the Germany] Chancellor Merkel or myself, never, never will we turn our backs on the euro. We will never abandon the euro, we will never drop the euro," he told the World Economic Forum in Davos on Thursday.

"The disappearance of the euro would be so cataclysmic that we can't even possibly entertain the idea."

Jean-Claude Trichet, the head of the European Central Bank, added to Sarkozy's comments at the Swiss forum, insisting that the currency was not in crisis.

He said individual countries in the European Union may have debt problems, but the euro zone itself is sound,  although added that "good individual behaviour" and surveillance had to be improved to ensure the economic health of the region.

Sarkozy also warned that euro countries cannot continue to "mount up staggering debts without thinking about the imbalances".

Participants at the five-day conference in the Swiss resort are holding back-to-back panels on the shared currency.

Euro zone countries have been battling to prevent the debt crisis from spreading to other economies in the bloc, after the EU and International Monetary Fund agreed loans for Greece and Ireland.

Currency imbalances

Sarkozy has also made concerns about China's low-valued currency and the dominance of the US dollar in world trade a key priority for his leadership of the G20 group of nations.

He that global currency imbalances "one of these days will bring down the whole pack of cards unless we attend to this very swiftly and very strongly".

Fear of a currency war has also crept into the debate over global trade recently, with Chen Deming, the Chinese commerce minister; Pascal Lamy, the World Trade Organisation head; and Robert Zoellick, the World Bank head, taking up the issue on Thursday.

The conference was briefly disrupted by a small explosion at a hotel, which broke windows in two windows but caused no injuries.

It occurred in a storage room of the Posthotel Morosani shortly after 0800 GMT on Thursday, regional police said. Organisers of the economic forum said cause was a firework.

The incident happened on the day Sarkozy, Nick Clegg, the British deputy prime minister, and Bill Clinton, former US president, were all due to speak.

Swiss federal prosecutors said they were investigating the incident.

Source:
Agencies
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