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Merkel deflects call for bigger eurozone fund
German chancellor tells Davos forum that Berlin will stand by euro, but will not be forced into unrealistic promises.
Last Modified: 26 Jan 2012 11:31

Germany is determined to play a full part in combating the eurozone crisis but will not commit to anything that it cannot deliver, Angela Merkel, the German chancellor has told delegates at the annual World Economic Forum (WEF) in Davos.

Delivering the keynote address in Switzerland, Merkel questioned the rationale of those in financial markets, governments and the International Monetary Fund who were pressing Berlin to put more money on the table, but did not rule it out

Merkel said: "We have said right from the start that we want to stand up for the euro, but what we don't want is a situation where we are forced to promise something that we will not be able to fulfil.

"If Germany, for example, on behalf of all the other member countries, were promising something that - if the markets really attack us we would not be able to come up with - then we have indeed an open flank."

About 40 heads of government, including Merkel and David Cameron, the British prime minister, are attending the event to discuss issues ranging from the eurozone crisis to Iran's nuclear programme and trends in science and the arts.

Klaus Schwab, the founder and organiser of Davos, said this year's meeting would focus on how to develop a new world model as "capitalism in its current form, has no place in the world around us".

The conference comes amid a warning from the IMF that Europe's debt crisis could drag the rest of the world into recession.

The German chancellor said: "Now have a serious erosion of confidence in the rest of the world. They are not sure we are going to do something about it."

Structural weaknesses

Merkel told delegates at the five-day gathering of political and business leaders that the eurozone contained structural weaknesses and that there were major imbalances in members' competitiveness.

IN VIDEO


Al Jazeera's Andrew Simmons reports from Davos

"These structural weaknesses have been much more acutely felt," since the crisis began flaring up two years ago, she said.

"We have to address them. Now we really have to do something about them."

Speaking to Al Jazeera in Davos, Ursula Von Der Leyen, Germany's labour minister, said that a potential Greek default "would not diminish the structural problems we have [in Europe]".

"Look at the long-term competitiveness of Europe ... in the long-term we need work in Germany and Europe. We need a strong Europe," Von Der Leyen said.

"If we weaken Europe and only look at how to put in money into short-term reactions, we would not be [addressing] the structural problems [or] competitiveness."

Jagger exit

Leaders from the world's biggest 1,000 companies are attending the WEF, which requires an the annual membership fee of $45,000.

UK newspaper The Sun reported on Tuesday that Rolling Stones singer Mick Jagger would be the star attraction at an event organised by Cameron's office to promote Britain.

But after news of his appearance leaked out, Jagger, who received a knighthood from Queen Elizabeth in 2003, revealed he had had second thoughts.

"During my career I have always eschewed party politics and came to Davos as a guest, as I thought it would be
stimulating ... I have always been interested in economics and world events," Jagger said in a statement.

"I now find myself being used as a political football and there has been a lot of comment about my political allegiances which are inaccurate.

"I think it's best I decline the invitation to the key event and curtail my visit."

About 5,000 Swiss soldiers have been mobilised to provide security over the course of the gathering while the airspace over the exclusive resort has been severely restricted.

A small group of anti-capitalist activists have made their way to Davos, building a protest igloo.

Half a dozen demonstrators appeared briefly outside the security perimeter on Tuesday, painting anti-capitalist slogans in the snow.

Source:
Al Jazeera and agencies
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