The German government and the Bundesbank pledged their support on Wednesday for European monetary union after press reports suggested that Berlin blamed the euro for economic weakness in Germany.

"Finance Minister (Hans) Eichel and Bundesbank President Axel Weber see the euro as a success story and an important step twoards securing the future of Europe," a Bundesbank statement said.

"Weber rules out a collapse of the monetary union" and "is not getting involved in this absurd discussion," it added.

The statement was released in reaction to a report in German news weekly Stern which claimed that Eichel's ministry had blamed the euro for weak economic growth in Germany.

Stern, in an advance excerpt from Thursday's edition, said Eichel and Weber had discussed the issue last week of a potential collapse of the EU monetary union.

The Bundesbank retorted that the two officials frequently held meetings to discuss the current financial and economic situation.

The magazine quoted a confidential note prepared by the ministry for Eichel which said that Germany had seen its economic advantages eroded as a result of the introduction of the euro because it could no longer lower interest rates compared with other European states.

Stern said that countries which had high interest rates before monetary union was launched, such as Greece, Ireland, Portugal and Spain, had used the euro currency to "enormous financial advantage" while in Germany, the euro had restricted economic growth.