Bloomberg News

Noonan Says Euro Solid; Issue Is ‘Can Everyone Stay In’

October 05, 2011

(Adds Noonan comment in fifth paragraph.)

Oct. 5 (Bloomberg) -- Ireland’s Finance Minister Michael Noonan said euro nation governments must “get their economies into shape” to ensure the viability of the euro region.

“The euro is as solid as a rock, the issue is who is in and who is out and can everyone stay in,” Noonan said in the Dublin parliament today. “That is what the debate is about and everybody has to get their economies into shape so that they can all participate.”

Noonan said he has stressed to European colleagues the need for Ireland and bigger euro area states to be protected by a “firewall” from further contagion from Greece. As many as 20,000 people marched through Athens’ central square today in protest against Prime Minister George Papandreou’s 6.6 billion euro ($8.7 billion) austerity plan, as his government seeks to avoid default.

Nouriel Roubini, chairman of Roubini Global Economics LLC, said in an Oct. 2 interview in Dubai that Greece would be better off outside the euro and that in three to five years, there’s a “good probability that the euro zone is smaller than” now.

“The problem isn’t the euro, the problem is with the euro zone,” said Noonan. “The euro is a very solid currency.”

German Chancellor Angela Merkel held talks in Brussels today with European Commission President Jose Barroso as financial shares rose amid speculation that euro-area policy makers were working on plans to boost bank capital to contain the region’s debt crisis.

Merkel said late yesterday that she was “deeply convinced” that Europe’s problems can only be solved jointly.

“Solidarity is always cheaper than if we were to go it alone and wind up with the problem Switzerland has -- that the currency level is so high that you can’t export any products anymore,” Merkel said in a speech to members of her Christian Democratic Union in Magdeburg, eastern Germany. “Today, going it alone is no path to a better future.”

--With assistance from Tom Stoukas in Athens and Simon Kennedy in London. Editors: Dara Doyle, Jonas Bergman

To contact the reporters on this story: Finbarr Flynn at fflynn3@bloomberg.net; Joe Brennan in Dublin at jbrennan29@bloomberg.net

To contact the editor responsible for this story: Edward Evans at eevans3@bloomberg.net


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