An archive photo of EC President Barroso and German chancellor Merkel before talks in Berlin in October 2007.
European Commission President Jose Barroso and German chancellor Angela Merkel have moved to stave off nervousness about the euro amid speculation about the future of the EU’s common currency and whether any other members of the bloc will, like Greece and Ireland, need bailouts.
Merkel, whose remarks on November 23 that the 16-euro zone was in an extremely serious situation were accompanied by a slide in the currency’s value that had been worsened by the plan to rescue Dublin’s finances, expressed confidence on November 25 about the euro’s future.
Her statement in Berlin was made as the euro was close to a two-month low against the US dollar.
Merkel also has spoken of the idea to have a permanent mechanism to provide bailouts.
November 26 saw a flurry of denials of a story in the Financial Times Deutschland that Portugal was being pressed by European states to ask for a bailout of its debt troubles.
No aid plan had been requested or suggested, Barroso said. The reports were "absolutely false, completely false," the BBC reported him as saying.
On November 26, Portugal approved its 2011 budget, which seeks to cut the country's deficit from 7.3 per cent of economic output this year to 4.6 per cent in 2011 and will see public spending cut while the maximum rate value-added tax is increased to 23 per cent.
Portugal also rejected reports it would be negotiating a bailout.
Addressing the European Parliament on November 24, Barroso spoke of the importance of safeguarding the financial stability of Ireland, the euro zone and the EU as a whole.
He said that legislative proposals from the European Commission will be operational as soon as possible in order to strengthen economic governance in Europe.
Bulgaria's Finance Minister Simeon Dyankov spoke recently of resuming the country's pursuit of accession to the euro zone.
"I frankly think the euro zone needs countries like Bulgaria with tight fiscal policies more than these countries need it," Dyankov said in an interview with CNN. He expressed confidence in the future of the euro zone, adding that it needed more members that were fiscally responsible.
On November 18, Dyankov was quoted as saying that Bulgaria would be able to cut its budget gap below the three per cent euro adoption limit in the second half of 2011.
"Our willingness to accept the euro is strong as ever, and the best option is to enter the mechanism as soon as possible," he said.
Bulgaria could also resort to launching a bond on the international market in order to support its financials, which would be, however, lower than the one billion euro stipulated in the budget draft.