AFP

BERLIN GERMAN Chancellor Angela Merkel told MPs from her conservative party on Wednesday that she believed the eurozone’s sovereign debt crisis was “not over” and the current relative calm was merely a “phase”.

“Concerning the development of the crisis, we cannot say today that it is over, we still find ourselves in one of the various phases of the crisis,” she told a meeting of her Christian Democrats’ parliamentary group on “Stable Conditions for Industry and Jobs in Germany”.

“We find ourselves at an absolutely decisive point,” Merkel said.

“How are the conditions (for investment) and how much hope can investors in Europe, in America, in Japan who put their money in these (eurozone) countries have of seeing their money again?” Merkel said Germany as Europe’s biggest economy was “not on a bad path”.

“But as a result of our demographic transformation (and) the great challenge posed by heightened economic competition, we have our work cut out for us,” she said.

“But we will manage,” Merkel said.

The threat posed by a potentially chaotic default of Greece sparked months of market turmoil and political wrangling as European leaders feared the debt contagion would spread throughout the 17-nation eurozone and beyond.

The Greek parliament formally ratified early Wednesday a second eurozone bailout scheme worth up to 130 billion euros ($170 billion).

The stopgap measures have given rise to hopes that the worst of the crisis is over for now, although analysts still warn of pervasive risks.