Davos leaders: Save the euro, and the planet

Associated Press
From left, WEF founder Klaus Schwab, Chairman and CEO, JSC VTB Bank, Russia, Andrei Kostin, Chairman of the Management Board of Deutsche Bank and Chairman and CEO, Cisco, USA, John Chambers speak with each other prior to a session at the World Economic Forum in Davos, Switzerland on Thursday, Jan. 27, 2011. Focus shifts on Thursday to the future of the euro and the issue of climate change. (AP Photo/Virginia Mayo)
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France's president tried Thursday to save the reputation of Europe and its currency, battered by debt crises and worries about whether the continent is being steamrolled by speedier eastern economies.

The presidents of South Africa and Mexico, meanwhile, worked to save the planet, sharing notes on hosting climate talks and how to get the U.S. and China — and the business community — to invest in cleaner energy.

The overall mood at the World Economic Forum this year is more upbeat than the past two, but by no means celebratory. Thursday was no exception, as leaders, bankers and investors struggled for ideas to get Europe growing again.

As they spoke, a small explosion in a Davos hotel briefly disrupted the Alpine winter calm, unusual for this Swiss resort, blanketed in security during the annual forum. Windows were broken but there were no injuries, Swiss police said.

French President Nicolas Sarkozy sought to shake the euro worriers awake, vowing that he and European partners will "never turn our backs on the euro" and calling it a linchpin of peace and prosperity. That gave an extra boost to the rebounding currency on world markets.

"The disappearance of the euro would be so cataclysmic that we can't even possibly entertain the idea," Sarkozy said.

Despite fears about the 17-nation currency's survival since the European Union and International Monetary Fund had to bail out debt-laden Greece and then Ireland last year, "the euro is still there," he said.

"Europe has had 60 years of peace and therefore we will never let the euro go or be destroyed. ... I speak as much for my German friends as I do for the French," he said.

European Central Bank chief Jean-Claude Trichet, apparently trying to smooth concerns about above-target inflation, praised the euro's long-term prospects at another Davos session.

"The euro delivered what had been asked from it, namely price stability," he said.

Increasingly, the talk among European leaders is of closer economic union — instead of just monetary union. Trichet said he is pushing for bolder moves from EU leaders. "There is no time for complacency," he said.

The 2,500 participants at Davos can see the currency shock in their pockets, as hotels, restaurants and bars in the Swiss ski resort of Davos do business in francs, whose value has surged against the euro in recent months.

Swedish investor Jacob Wallenberg warned that Europe needs to act faster to stay competitive.

"We all see countries such as China, India, rapidly becoming much more competitive," he said. "It's not a matter of they're going to bypass us. They're going to run us over."

Environmental issues also came to the fore, with talk of electric cars and solar energy and China — again — "winning the green race."

In a panel discussion hosted by The Associated Press, U.N. climate chief Christiana Figueres said China "is going to leave us all in the dust" in the transition toward a more energy-efficient global economy.

The Chinese, she said, "are not doing it just because they want to save the planet. They are doing it because it's good for the economy."

Mexican President Felipe Calderon, who hosted the last U.N. climate talks in Cancun, said, "I want to see the action" from the U.S. on reducing emissions. South African President Jacob Zuma, who hosts the next climate talks in Durban, said Washington cannot be left out of the clean energy game.

Ernest Moniz, director of the MIT Energy Initiative and a member of President Barack Obama's Council of Advisors on Science and Technology, said Thursday that solar power is, ultimately, the real game changer. Eventually, he said, the sun should be used to make not just electricity but also fuels.

Shai Agassi says one answer is electric cars. Agassi predicted to The Associated Press that before 2020, more people everywhere will be buying electric cars than those powered by gasoline. "It doesn't mean that oil is not necessary, but we're starting the way out," said Agassi, a former top executive for information giant SAP AG who launched his Better Place venture several years ago.

Oil isn't going away yet, however. Exxon Mobil Corp. signed a deal at Davos with Russia's biggest oil company, Rosneft, to develop oil and gas resources in the Black Sea, a new boost for Russia's lucrative energy sector despite concerns about the challenges of investing there.

Elsewhere at Davos on Thursday:

— Africa emerged as the hot new continent for trade and investment. U.N. Secretary-General Ban Ki-moon was optimistic. So were Ethiopia's president, Zimbabwe's prime minister, former British Prime Minister Tony Blair, and business executives from South Africa, Egypt, India and many other countries.

—The head of the World Trade Organization, Pascal Lamy, said he hopes key commerce ministers meeting in Switzerland this week will commit to accelerating talks on a new global trade deal.

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Matt Moore, Edith M. Lederer and Dan Perry contributed to this report.

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