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Europe

Europe's central bank chief dismisses German worries about euro currency

Head of the European Central Bank Jean-Claude Trichet has told Germans the euro is "credible and stable." His comments came as polls indicate that many in Germany feel nostalgia for the deutschmark.

Deutschmarks and euros

Germans switched to euro notes and coins in 2002

The president of the European Central Bank Jean-Claude Trichet has rejected criticism that the euro was a less stable currency than the old German deutschmark. In an interview with mass circulation daily Bild, he said the European single currency had been "credible and stable" throughout the global financial crisis.

"In the past 12 years, the average rate of price increase in the eurozone has been 1.97 percent, and in Germany only 1.5 percent."

His comments came in reaction to recent polls indicating that many Germans still feel nostalgic for the deutschmark, the currency they kept in their wallets from after World War II until the introduction of euro notes in 2002.

The global financial crisis and the debt crises in Greece and Ireland has lead widespread nervousness among Europeans about how their single currency would hold up, should countries like Portugal and Spain also need assistance from Brussels.

Euro more stable than Deutschmark

Trichet said he was confident the euro would still be around in 20 years and told Germans they need not fear price instability. In fact, prices under the euro had been more stable in Germany than in the pre-euro years, he pointed out.

Despite the problems in some member countries, the euro as such was in no crisis, Trichet said.

"It's rather that we have a crisis of public finance in some nations," he said. "States that had spent more than they earned had to act."

He also reassured Germans that those countries with debt levels in excess of the prescribed regulations would be forced to act.

"The ECB is expecting governments in the eurozone to make enormous efforts to reduce debt," Trichet said. "Debts must be repaid. This is an issue of trust."

Trichet took over as head of the ECB in 2003 but his term will expire in October 2011. He is expected to be succeeded by either Axel Weber, currently head of Germany's Bundesbank, or by Italian banker Mario Draghi.

Author: Andreas Illmer (AFP, dpa)

Editor: Sean Sinico

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