Merkel backs ECB's approach to defending eurozone

Angela Merkel has made it clear she is in line with the European Central Bank's (ECB) approach to defending the eurozone and the single currency.

The euro has had a good morning so far on the forex markets versus the majority of its trading partners, as the German chancellor made her views known on her first state visit after her summer break from government.

Speaking in a press conference in Ottawa with the Canadian prime minister Stephen Harper, Ms Merkel said she is in line with the Frankfurt-headquartered institution's attitude to conditions for helping reduce borrowing costs in debt-addled countries.

She acknowledged that time is a major factor as the crisis develops, but she feels the single currency region is on the right track to bringing the eurozone back into recovery.

The Christian Democrat party leader stated that she and her European counterparts are "committed to [doing] everything we can to maintain the common currency".

She reiterated recent ECB decisions that political action "in the form of conditionality" is necessary for the positive progression of the euro.

European leaders are putting Ms Merkel under increased scrutiny and pressure to ease the most indebted countries' bailout terms, while international partners are eager for her to take positive action to stem contagion.

While in Canada, the German politician hailed the North American nation's own budget and strict debt programme as a model for the single currency region to follow.

Ms Merkel has returned from vacation just as the eurozone crisis enters its next phase, as Germany's supreme court is to rule on the legality of Europe's permanent rescue fund in August.

This falls in line with Greece's international creditors reporting back on progress in meeting bailout goals.

At 09:05 BST, the euro was stable in trading with the dollar, with €1 buying $1.23, while it gained by nearly 0.1 per cent versus the pound, so €1 now equals £0.78.