Saturday, August 18, 2012

Small states squabble over euro zone's future

August 17, 2012

Smaller euro zone countries that have retained top credit ratings through the region's crisis squabbled on Friday over whether struggling nations like Greece that threaten the currency union's stability should be kicked out.

Top Austrian and Finnish politicians insisted they were committed to keeping the union intact after ministers from junior coalition parties said they were preparing for a break-up of the bloc, or called for countries that broke promises to be thrown out.

The mixed messages contrasted with a show of solidarity late on Thursday from western Europe's most powerful politician, German Chancellor Angela Merkel, which raised investor hopes that the bloc might finally be getting a grip on its problems.

Speaking in Ottawa, she said declarations from European Central Bank President Mario Draghi, who last month pledged to do whatever it took to save the euro, were "completely in line" with the approach taken by European leaders.

In Vienna, Austrian Chancellor Werner Faymann said he would not want to see any country ejected from the euro zone.

"The negative consequences of a break-up of the euro zone would far outweigh any advantages for individual countries," Faymann said, after his vice chancellor called for a mechanism for throwing out nations that reneged on financial promises.


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