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Unilateral move miffs EU partners

Germany declared war on speculators on Wednesday, wrongfooting European partners who said they were not consulted about an overnight ban on naked short sales of a range of assets that rattled markets.

business Updated: May 19, 2010 20:15 IST

Germany declared war on speculators on Wednesday, wrongfooting European partners who said they were not consulted about an overnight ban on naked short sales of a range of assets that rattled markets.

Chancellor Angela Merkel told German lawmakers that EU leaders had to ensure markets could not “extort” the state any more. “I'll boil it down to its core: The euro is the foundation for growth and prosperity, along with the common market -- also for Germany. The euro is in danger,” Merkel told parliament.

But Germany's European partners were blindsided by the ban. France and senior EU officials said they had not been consulted and called for concerted, not unilateral, action.

Markets were spooked by the lack of coordination and fears that Germany's move was in response to a new problems.

EU finance ministers will discuss Germany's ban on Friday, said EU President Herman van Rompuy, who is to chair meetings on toughening EU budget rules.

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