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Merkel Touts Euro in New Year's Address


German Chancellor Angela Merkel after her annual New Year's speech at the chancellery in Berlin, Dec. 30, 2011

German Chancellor Angela Merkel after her annual New Year's speech at the chancellery in Berlin, Dec. 30, 2011

German Chancellor Angela Merkel stressed the importance of the euro currency to Germany and the wider European Union in her New Year's address. Some analysts have predicted the crises in the Euro Zone, however, could force the union to break up in the coming decade.

Merkel said Friday that Germany remains committed to the euro. She said Europe is in the middle of a great test. And despite upheaval during 2010, now is the time to support the currency.

In the past year sovereign debt crises in Greece and Ireland threatened financial stability across the euro zone. The EU bailed out Greece and Ireland, and set up a mechanism to help future euro countries in trouble.

That euro fund is worth about $600 billion in loan guarantees from member nations. Around one-quarter of that sum was paid in by Germany.

Merkel said Friday, though, that Germany has come out of the euro crises strengthened. The euro, she said, is the foundation of prosperity in Europe.

But a recent poll suggests many in Germany are not happy about bailing out their euro neighbors. Earlier this month, 49 percent of people polled by the German newspaper Bild said they want Germany's former currency, the deutschmark, back.

Those tensions may only get worse in the coming year. The economies of other Euro Zone countries are in danger and may need bailouts of their own. A Britain-based research group, the Center for Economics and Business Research, said Friday that Spain and Italy will have to refinance more than $500 billion of bonds next year.

The research group said that could mean a new crisis for the Euro Zone and might even lead to the union disbanding. It said that over the next 10 years, there's only a one in five chance of the euro currency area surviving in its current form.

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