Davos

Sarkozy vows to protect euro, calls for countries to honour aid pledge

Reuters/Vincent Kessler

French president Nicolas Sarkozy said that he and German Chancellor Angela Merkel would never allow the euro currency to fail. Speaking Thursday at the World Economic in Davos, Switzerland, he also re-iterated a call for a financial transaction tax to fund development.

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"Whether it be Chancellor Merkel or myself, never, never will we turn our backs on the euro. We will never abandon the euro, we will never drop the euro," said Sarkozy, dismissing speculation against the European currency as several countries struggle with massive public debt.

"For us, it's not simply an economic issue, it has to do with our identity as Europeans. For those of you who want to bet against the euro, be careful how you invest. We are determined to ensure the strength of the euro."

Sarkozy, who is chairing the G8 and G20 group of rich countries, also called for an “infinitesimal” tax on financial transactions to finance the 120 billion euros in development aid to poor countries promised by rich countries in Copenhagen at the end of 2009.

“Since all of our budgets have deficits, no one can imagine that this money will come from state budgets, so we have no choice,” he said, adding that to not back out of their promises, countries need to find innovative ways of financing the aid.

He warned against the rise of terrorism fed by poverty.

“If we do not do this, if we do not have the wisdom of foresight, then you will see that the most reasonable people leading these poor countries will be swept aside,” he said, speaking of “the rise of religious extremism fed by injustices.”

Sarkozy said he was open to other ideas to fund the development aid, and suggested that a group of countries meet to find a solution.

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