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Europe is committed to stability -- Van Rompuy

European Council president Herman Van Rompuy said yesterday there is a commitment at the highest levels in Europe to do whatever is necessary to safeguard stability in the eurozone.

"Let me be very clear, there is the highest commitment at the highest level to do whatever is necessary to safeguard financial stability," Mr Van Rompuy said.

The council president added that the euro is a strong and stable currency and praised Portugal for its efforts to put its economy on a stable footing after it became the third eurozone country to receive a bailout following Ireland and Greece.

"I have no doubt that with effort, time and support, Portugal will turn the corner," he said.

Portugal requested a €78bn bailout in March after its last government collapsed.

The new centre-right government has promised to rapidly carry out economic reforms and austerity measures required by the bailout to cut the budget deficit. But Prime Minister Pedro Passos Coelho warned that threats to the eurozone were systemic and further measures may be necessary.

"From our point of view the measures announced so far are extremely positive but they may not be enough to find a global solution to confront the volatility that we have seen," Mr Coelho said, referring to this week's instability in the eurozone.

A degree of optimism had developed in Portugal since Mr Coelho came to power, but its financial markets have been pounded again since Moody's cut the country's credit rating by four notches to junk last week.

Irish Independent