German Chancellor Angela Merkel bowed to pressure on Sunday and agreed to back popular opposition candidate Joachim Gauck to become president, averting a political fight that might have distracted her government from solving the euro zone crisis.
Germany's president resigned Friday in a scandal over favors he allegedly received before becoming head of state, and Chancellor Angela Merkel moved quickly to try and head off a domestic political crisis as she grapples with Europe's debt troubles.
Brazilian Foreign Minister Antonio Patriota and his visiting German counterpart Guido Westerwelle on Monday called for signing a free trade agreement between the European Union and the South American trade bloc Mercosur.
The Euro edged up on Monday after Greece's parliament approved an austerity bill that put the country a step closer to securing much-needed funds, though market players worried about more hurdles before lenders seal a bailout deal.
The majority of Germans feel the Euro currency bloc would be better off if debt-crippled Greece left it, a poll published in mass-selling newspaper Bild am Sonntag showed.
Germany's persistent policies to push down wages have harmed fellow Euro zone member countries and contributed to the bloc's current debt crisis, the International Labor Organization (ILO) said in Geneva.
Billionaire investor George Soros said that German-driven austerity plans in Europe risk creating tensions that could splinter the region as it struggles with a debt crisis entering its third year.
German Chancellor Angela Merkel appealed to business leaders at the World Economic Forum to give policy makers the space they need to tackle the debt crisis, pledging that Europe will pull together and restore confidence.
Ratings downgrades in the Euro zone by S&P underline why Europe must seal a pact to tighten fiscal rules quickly and get its permanent bailout fund up and running as soon as possible, German Chancellor Angela Merkel said on Saturday.
German unemployment fell to its lowest rate in December since 1991, according to the German Federal Labour Agency.