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Portugal, euro questions dominate Merkel visit to Malta (Roundup)

Jan 10, 2011, 18:17 GMT

Valletta - Questions about the strength of the euro and the Portuguese economy were some of the key issues German Chancellor Angela Merkel discussed Monday during her first-ever visit to Malta.

Concerns that Portugal could need a bailout have pushed the euro to its lowest level in four months and renewed jitters about European government debt.

But Merkel stressed Monday that Germany would never seek to force another eurozone member to seek a bailout it didn't think it needed.

'We believe that every country has to make its own decisions,' she said. 'We have never and would never, in any situation, apply pressure on another nation.'

But she added that Germany wants 'a strong, stable Europe, a strong euro.'

Portugal has insisted for weeks that it will not need a bailout. However, that has done little to calm investors, who watched last year as Greece and then Ireland were left with no choice but to request bailouts that came with requirements for stiff reforms.

Merkel called upon other eurozone countries to implement heralded reforms in their budgets.

'We have believably shown, that there are new starts, especially in the stability culture of the entire European Union,' said Merkel. 'This trustworthiness must now be proven by fulfilling responsibilities that have to be taken up individually.'

Changing behaviour to achieve more stability would work, she said, noting a major change in the way Europe has accepted its new budgetary responsibilities. But she also warned the sins of the past must not be repeated.

Maltese Prime Minister Lawrence Gonzi also called for more moves to shore up Europe's state budgets, saying all tools must be employed to stabilize the financial system. He pointed to Malta's own efforts to boost economic growth, which Merkel praised.

'Malta has permanently brought in a new stability culture to the European Union.'

On other issues, Gonzi thanked Merkel for her offers to help Malta overcome its refugee problem. Merkel noted that the refugee problem has to be addressed in Africa.

Merkel also made a call for a European-wide electrical energy network ahead of a February 4 EU summit on energy. Such a move would create a continent-wide market for energy.

The German chancellor is to travel from Malta across the Mediterranean to the divided island of Cyprus on Tuesday.

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