Schroeder's joint NY message

Schroeder (right) and Fischer: Both are wary of widening the war on terror

BERLIN, Germany -- Chancellor Gerhard Schroeder used his New Year's message to support the international war on terror and the launch of the euro currency.

Schroeder said Germany was duty-bound to repay the U.S. for its support during the Cold War and to adopt a greater role on the global stage.

And he said the euro, which becomes legal tender at midnight, would herald the return of good times economically for Germany which has suffered during the global slowdown.

In a statement released on Monday to the Associated Press, Schroeder said: "We are no longer allowed to stand on the sidelines, not even when diplomacy is no longer enough to solve conflicts, and military means are needed to end repression and restore freedom..

"We will fight this terrorism with all our strength and with every appropriate means in every place."

EXTRA INFORMATION In-depth: War Against Terror  In-depth: Euro launch

Germany pledged up to 3,900 troops to the war on terror -- although none were actually used on the ground in Afghanistan -- and a further 1,200 to join the international security force for Afghanistan.

The troops promised for the war on terror signaled the first time since World War II that German troops had been approved for action abroad.

Fighting international terrorism through Germany's contribution in the war on groups such as Osama bin Laden's al Qaida as well as new security regulations at home remains a priority.

But both Schroeder and his foreign minister, Joschka Fischer, have warned against seeking new targets once the Afghan operation is complete.

Schroeder said Germany had a duty to help bring to other parts of the world an era of peace highlighted in Europe by the introduction of the new euro single currency.

He said that as the European Union continued developing "at worst, conflicts take place between bureaucracies, but no more between citizens," he said.

"This dream becomes tangible with the common currency."

Many Germans remain unconvinced about the euro project and are only reluctantly giving up the traditionally strong mark.

"The mark meant a lot to us," he said. "We connect it with the memory of good times. But you can be sure: even better ones are ahead of us."

While Schroeder forecast Germany's economy would pick up in 2002 the country is currently threatened with recession.

Schroeder has already abandoned a pledge to slash unemployment in time for national elections next September.

And he told Germans that preserving and creating jobs would be his "most urgent priority" for 2002 especially in the former communist east.