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Merkel's comments soothe global markets

Friday, August 17, 2012 - 02:06

Aug.17 - German Chancellor Angela Merkel's support for ECB President Mario Draghi's crisis-fighting strategy gave global markets a welcomed boost. Ciara Sutton reports.

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German Chancellor Angela Merkel has given global shares a boost. They hit three-month highs in morning trade, with top European stocks lifted by support from Merkel for European Central Bank intervention to calm the euro zone's debt troubles. Germany's DAX index opened above the key mark of 7,000 points, and the euro hit a six-week high against the yen. Visiting Canada's prime minister Stephen Harper, Merkel gave strong backing to the ECB president Mario Draghi's commitment to doing whatever its takes to save the euro. SOUNDBITE: GERMAN CHANCELLOR ANGELA MERKEL (GERMAN WITH SIMULTANEOUS ENGLIGH TRANSLATION) SAYING: "The European Central Bank although it is of course independent is completely in line with what we've said all along." But not everyone's convinced - Finland's foreign minister told the Daily Telegraph newspaper that leaders must prepare for the possibility of the euro zone breaking up. Another Finnish minister later insisted this did not reflect the government's position. Will Hobbs, Equity Strategist at Barclays Wealth, says such talk is not enough to spook the markets. SOUNDBITE: EQUITY STRATEGIST AT BARCLAYS WEALTH, WILL HOBBS (English) SAYING: "I think we've had this divided front from Europe for some time now and I think we are all getting used to it. And from our perspective Germany has been softening its stance for some time now and perhaps they are being helped a little bit by slightly softer data at home which is forcing them towards it but also the ECB's latest proposal is very much as Angela Merkel and you just noted now, very much in line with what Germany has been hoping for - country's that ask for bailout money, should be subject to very strict conditionality." Merkel has resisted pressure to introduce common euro zone bonds as a solution to the bloc's three-year debt crisis. She is instead pressing her partners to move towards a so-called "fiscal union". Canada's Harper, whose government has criticised Europe in the past for moving too slow, praised Merkel for her approach. He presented her with a canoe paddle as a gift on her trip - with no apparent symbolism about being up the creek. Ciara Sutton, Reuters.

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Merkel's comments soothe global markets

Friday, August 17, 2012 - 02:06