The OECD's Gurria on why the euro will survive

Digging Europe out of debt
Digging Europe out of debt

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Story highlights

  • Angel Gurria is the Secretary-General of the OECD
  • He says Europe must confront the issue of sovereign debt
  • However, he say the euro is going to continue to be the largest single trading bloc
Angel Gurria, Mexico's minister of finance between 1998 - 2000, is credited with helping steer his country's economy away from relative volatility toward a period of stability.
Now, as Secretary-General of the Organization of Economic Cooperation and Development (OECD), he is watching the eurozone debt drama unfold.
The crisis - which has forced weak eurozone countries Greece, Ireland and Portugal to take bailouts - must be more actively confronted by Europe's leaders, he said. The issue has become "critical," Gurria said. "[Europe's leaders] have to deal with that."
The eurozone is facing "an erosion of confidence ...and you deal with that first of all by ring fencing the countries that have a problem and by not allowing the contagion to spread."
Plans to stem the eurozone crisis have failed to convince the markets, which remain concerned it could spill into the bloc's bigger economies, such as Italy and Spain.
According to Gurria, the markets need assurance there is enough firepower that the problem can be contained. Doing so -- alongside providing assurances that fragile banks on the continent will be protected from such events such as a default on sovereign debt -- is vital, he said.
Although recognizing the very serious debt issues facing Eurozone countries such as Greece, Ireland, Portugal and Italy, Gurria is careful not to talk down the future of Europe and the euro. "I think the euro is going to be alright," he said. "I think there are going to be more countries joining the euro. The euro is going to continue to be the largest single trading block," he added.
"The fact that one country in the euro, Greece in this particular case, has a debt problem does not mean the euro is going to go to waste," he said.