Jan 25 - German Chancellor Angela Merkel officially opened the World Economic Forum in Davos with questions about whether an increased euro zone rescue fund would reassure markets. Sonia Legg reports.
It was no accident that German Chancellor Angela Merkel was chosen to give the opening address at the World Economic Forum in Davos. The euro zone debt crisis is a key issue among delegates and Germany is the euro zone's paymaster. Merkel said she was absolutely convinced the debt crisis would be overcome although she questioned whether an increase in the euro zone's rescue fund would reassure markets. SOUNDBITE: GERMAN CHANCELLOR ANGELA MERKEL (GERMAN WITH ENGLISH TRANSLATION) SAYING: "What we do not want is a situation where we promise something that in the end we cannot deliver - because then Europe will be really vulnerable." Merkel isn't the only one in Davos who believes Europe is vulnerable. And U.S. billionaire investor George Soros had a warning about Germany's role in the crisis. SOUNDBITE: GEORGE SOROS, CHAIRMAN, SOROS FUND MANAGEMENT (ENGLISH) SAYING: "Instead of the IMF, Germany is acting as the task master, imposing tough fiscal discipline. And this will generate both economic and political tensions that could destroy the European Union." Some delegates in Davos were also concerned, including Economics Nobel Prize winner Joseph Stiglitz and Standard Chartered's Chief Economist Gerard Lyons. SOUNDBITE: JOSEPH STIGLITZ, 2001 ECONOMICS NOBEL PRIZE WINNER AND COLUMBIA UNIVERSITY PROFESSOR (ENGLISH) SAYING: "I was hoping that after she said solidarity that meant okay, we are going to help the countries that need help. We have to have a common treasury, we have to have a fiscal framework that is more than austerity but in the end, it was back to the same old austerity, austerity, austerity which is not going to bring growth." SOUNDBITE: GERARD LYONS, CHIEF ECONOMIST STANDARD CHARTERED (ENGLISH) SAYING: "She was outlining more Europe but in essence, United States of Europe by the back door. These were gradual steps towards giving more power, ceding more power to the centre of Europe and I think as she touched on difficult decisions and discussions ahead." Merkel admitted a lot of confidence in the euro zone had been lost recently. And confidence, she said, was the "most important currency". Sonia Legg in Davos for Reuters.