Merkel says euro region is still ‘fragile’

German Chancellor Angela Merkel said turmoil in global markets caused by a Portuguese bank, underscores the euro region’s fragility and shows the need for governments to respect debt and deficit limits.

Merkel’s warning at a campaign rally of her Christian Democratic Union was a renewed message to France and Italy to refrain from softening euro-area rules, as she revived rhetoric reminiscent of the peak of Europe’s debt crisis.

While policy makers put “many rules” in place to prevent a repeat of the crisis, “if we now move away from those rules, for instance on the Stability and Growth Pact, on everything we’ve done to stabilise the euro, we could very quickly get into a situation where we start foundering,” Merkel said .