European currency is at stake in the Ireland debt crisis - says German Finance Minister

Schaeuble made the comments during a parliament session in the German capital, saying the single European currency is at stake in the Ireland debt crisis."Our common currency is on the line. And we have to take responsibility for that and if we are not unable to defend our common currency as a stable currency in the long-term then the economic and social effects on this country and our citizens are incalculable. And we have to take responsibility for this," he said.

Even though the fiscal situation has improved slightly this year due to strong growth the finance minister remained downbeat.

"Some people seem to think we are swimming in money. We are not swimming in money. We are drowning in debt and are trying to defend ourselves," Schaeuble said.

At a meeting with the German Confederation Of German Employers Associations the German Chancellor echoed her finance minister, saying Ireland's crisis was different to Greece's but just as worrying and the euro was in an "exceptionally serious" situation.

"We are in an exceptionally situation regarding the euro. I don't want to be melodramatic but i want to say this: One year ago, none of us could have imagined the sorts of discussions we would be having in the Spring and the measures we would have to undertake," Chancellor Angela Merkel said.

Merkel also noted that it was Ireland's banks which triggered the budget deficit and said tougher sanctions were the right approach.

"Now we have the difficulties in Ireland. They are different to those in Greece but just as worrying. Here the banks have brought about the state deficit. Ireland has a nearly 30 percent deficit this year. This is, obviously, a dramatic figure. This is - and I want to say this again - an effect of the time before the economic crisis. They are not new effects but still effects from... - and that is how we can see that this economic crisis is still not over - the finance and economic crisis," Merkel added.

Germany has faced strong criticism for mulling over decisions during the euro zone debt crisis, but Merkel reiterated her support for the single currency and member country's obligations to sustaining the common currency.

"And now we have to negotiate new conditions with Ireland so that we deal with the causes but it is a good thing and the right thing that we have this safety fund that shows the solidarity and the commitment of the euro countries," she said.