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Germany says euro stable, shares rise

Monday, August 22, 2011 - 02:07

Aug. 22 - European shares gained on Monday and the euro also rose against the dollar. German Finance Minister Wolfgang Schaeuble has called the euro a stable currency, but investors remain concerned about the euro zone debt crisis. Joanna Partridge reports

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Brief respite for investors on Monday as European shares moved back to positive territory. This comes after several sessions of sharp falls - over growing concerns that the global economy is heading for recession again - and fears the euro zone debt crisis could lead to a credit crunch. Trader Oliver Roth thinks it will be a calmer week. SOUNDBITE: Oliver Roth, Trader at Close Brothers Seydler bank, saying (English): "I am expecting a slow-down of the selling market, simply because they are out of breath and they need some time to rest." German Finance Minister Wolfgang Schaeuble said in a radio interview on Monday morning the euro has held steady against the dollar during the debt crisis and is a stable currency. The euro moved higher against the dollar - tracking the rise in European shares. But key bank-to-bank interest rates crept upwards, as U.S. banks remain wary of lending to their European counterparts in the face of possible U.S. recession and no end in sight to the euro zone's 18-month-old debt crisis. Many see the common euro zone bond as a lasting solution. But Germany has led resistance to the joint euro-denominated bonds - and over the weekend, German Chancellor Angela Merkel once again said they are the wrong answer to the crisis. German media have reported finance ministry calculations which show issuing joint bonds would cost Germany billions of euros a year. Adam Myers is a Senior Market Strategist at Credit Agricole. SOUNDBITE: Adam Myers, Senior Market Strategist at Credit Agricole CIB, saying (English): "Eurobonds in their current form and without any EU constitutional change are really just a relabelling of peripheral debt, and of course that relabelling merely means that Germany has to fund the periphery at any cost. And I think that is why it is so politically unpalateable in Germany at the moment." Germany and France have proposed a financial transaction tax as a way of solving the crisis. Schaeuble will meet his French counterpart on Tuesday to discuss the health of Europe's finances, and possible remedies like the transaction tax. But that may not enough to bring sustained calm to the markets. Joanna Partridge, Reuters

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Germany says euro stable, shares rise

Monday, August 22, 2011 - 02:07