Worst 'over in euro zone debt crisis'

Brussels, December 28, 2012

The worst of the euro zone sovereign debt crisis is over, German Finance Minister Wolfgang Schaeuble said.

He said governments in heavily indebted countries such as Greece have recognised that the crisis that began in Athens three years ago will only be overcome by implementing bitter reforms.

"I believe the worst is past. The government in Athens knows that it cannot financially overburden other euro zone countries. It is thus pushing forward with reforms," he said.

He was optimistic about France, Europe's second major economy, and its efforts to stop its debt burden from expanding.

"I am certain that France will fulfil its obligations. The government knows that every country has to permanently pursue reforms to remain competitive."

Wolfgang Franz, the head of the "wise men" panel of German government advisers and the independent ZEW think tank, was cautious about calling a turnaround in the crisis that has spread to Ireland, Portugal and Cyprus and forced Spain to seek a bailout for its banks.

"Time will tell if we have the worst behind us. There are silver linings on the horizon. The current account deficits in Spain and Portugal are declining because they have become more competitive and they're exporting more. "Greece has reduced its net new borrowing in relation to GDP," he added.-Reuters

Tags: Euro crisis |