In a speech in the Berlin Parliament, Angela Merkel said that the debt crisis and Germany’s role in stopping it will be the main topics of discussion at the next G20 summit in Mexico. Germany will use its economic strength for the benefit of European unity, the euro and the global economy, said the German Chancellor, who opposes the “apparently lighter” measures which may have adverse effects.
“All eyes are on Germany. But we all know that German power is not infinite. Our responsibility as the largest economy of Europe is to use our power in a credible way, so we can be useful for Europe,” Merkel said. She added that finding a solution to the crisis is a “Herculean task”, which requires European nations to agree step by step to the “political union”, giving up on the route a part of their national sovereignty. Merkel will attend the G20 summit on June 18 to 19 in Mexico, while in Greece will take place on June 17 general elections that might be decisive for the fate of the Euro currency.
Spain’s request of an aid of up to 100 billion to support its banks failed to calm the turmoil on financial markets which, according to President Barack Obama, are affecting the U.S. economy in an election year. The loans of Spanish banks from the European Central Bank have reached a record 287.8 billion euros in May, while bond yields with a term of 10 years exceeded the psychological threshold of 7%. Credit rating agency Moody’s downgraded Spain, from “A3” to “Baa3”, the last step of the category recommended to investors, and it revised the sovereign grade of Cyprus from “Ba1” from “BA3”, marking a worsening of debt crisis in Europe.
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