NEW YORK (Reuters) – The euro rallied to a three week high against the dollar on Friday as German Chancellor Angela Merkel and French President François Hollande spoke of their readiness to do anything to safeguard the euro zone.
The Forsa Institute survey, published in the Stern weekly, also showed Merkel’s junior coalition partner, the Free Democrats (FDP), which has said Greece should quit the euro, reaching the five percent threshold needed to enter parliament.
Fifty seven percent of those polled had a pessimistic view of Germany’s economic outlook, while only 12 percent were optimistic – a gap of 45 points which is the widest margin since October 2008 when the global financial crisis hit.
Germany, Europe’s largest economy, has weathered the euro zone debt crisis relatively well so far, with exports to non European markets booming and unemployment touching 20 year lows, even though a rash of recent data have pointed to a slowdown.
The poll gave her party 36 percent, unchanged from the last poll and nine points ahead of the main opposition center left Social Democrats (SPD).
“People have the feeling that she (Merkel) is tackling the problems and is standing up for German interests,” said Manfred Guellner, head of the Forsa Institute.
A second poll conducted for ARD TV channel on Wednesday showed 70 percent of Germans are satisfied with Merkel’s handling of the euro crisis.
But a large majority also think the worst is still to come and three quarters said Germany would suffer badly from a euro breakup.
Countries that pledge to implement reforms demanded by the EU’s executive Commission also would be able to tap rescue funds without having to go through the kind of tough austerity measures demanded of Greece, Portugal and Ireland, which have had to get international bailout packages.
She has also resisted calls from France and other partners for euro bonds, or mutualised debt, saying this would remove pressure on indebted countries to reform their economies.
Mr Draghi and a handful of other members of the central bank’s governing council are known to support a plan that would see the still to be approved permanent rescue fund, the European Stability Mechanism, granted a banking licence to give it access to central bank capital that could be deployed to buy bonds directly from troubled governments.
“A measure like a banking license makes us increasingly liable for undesirable developments in other countries. Ultimately it’s the German worker who, with the pennies he has saved up, becomes liable for such undesirable developments,” Rainer Bruederle, a senior member of the FDP.
“Germany’s national finances are not a self service shop for countries that are not prepared to make the changes they should have made a long time ago.”.
In the Forsa poll, the pro business FDP had 5 percent, up one percentage point from last week.
The FDP has hardened its stance on the euro zone crisis and its leader Philipp Roesler has said an exit for Greece – which is still falling far short of its fiscal targets despite two bailout programs – was no longer a taboo.
Led by the Christian Democrat Angela Merkel , it was supported by a grand coalition of the Christian Democratic Union , Christian Social Union of Bavaria , and the Social Democratic Party of Germany .
In the poll, conducted on July 23 27 among 2,501 people, 56 percent agreed that Greece should leave the euro zone while 35 percent said it should stay.
Dean Rockliffe is a business journalist based in Sao Paolo, Brazil. Dean has a passion for financial markets and breaking news stories and loves writing about business news, stock market, and economic opinions that matters most to its audience. Dean spends a lot of time discovering and researching latest financial markets and industry news stories in order to make sure the latest and greatest stories are brought to you first on BigBoardNews.com.
