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Greece must do its homework: Merkel

11 March 2010, 18:47 CET
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(THE HAGUE) - German Chancellor Angela Merkel said Thursday that Greece is itself responsible for regaining the confidence of financial markets and emerge from its financial turmoil.

"The confidence of the markets in the euro and in the Greek euro will be restored only if Greece does its homework," she said after a 90-minute meeting with Dutch Prime Minister Jan Peter Balkenende in The Hague.

She congratulated the Greek government for having taken "serious and courageous " steps in the right direction, and noted that Athens had not sought European financial aid.

Plans to cut spending and reduce the budget deficit "were having an effect," said Merkel. "We have seen the markets react positively."

Asked about the mooted creation of a European monetary fund to rescue struggling economies, Balkenende said it was "a bit too early" and "we have confidence in the International Monetary Fund".

Merkel has previously said an EMF "would be at the end of a chain" of necessary steps.

"The question is to see how we can contain euro speculation," she said Thursday, adding that "only the European Commission can do this. A member country cannot do it alone."

France, Germany and the head of the eurogroup earlier Thursday backed a ban on speculative trades involving high-risk financial instruments known as derivatives.

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