Germany's Westerwelle-no danger of Irish contagion

Published 11/24/2010, 03:16 AM
Updated 11/24/2010, 03:20 AM

BERLIN, Nov 24 (Reuters) - Ireland's debt crisis is unique and there is no risk of it spreading to other indebted euro zone countries, Vice Chancellor Guido Westerwelle said in a newspaper on Wednesday.

EU partners are watching the Irish turmoil with concern as a deepening political crisis threatens to derail plans for financial rescue by international lenders, while the lengthy bailout of Greece earlier this year are still fresh in mind.

"Unlike as in the Greek case initially, we now have an instrument and are prepared to react," Westerwelle told the Rheinische Post daily, referring to an international financial safety net set up in the wake of the Greek crisis.

"I see no danger of contamination, because each case is different," he added.

European financial markets slid on Tuesday, partly on fears of contagion to weaker euro zone countries, while the extra yield investors demand to hold Irish debt lifted the cost of borrowing for some shakier members like Portugal and Spain.

German Chancellor Angela Merkel on Tuesday said that the euro currency was in an "exceptionally serious situation".

Westerwelle, who is also Foreign Minister, said he saw no risk the currency bloc would fail. Asked if he thought countries may consider dropping the euro currency or leaving the European Union, Westerwelle answered: "No."

"Europe is the most successful peace project in the history of the continent and the guarantor of our prosperity ... It would be crazy if we as Germans, of all people, were to forget what we have in Europe," he said. (Writing by Brian Rohan)

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