BERLIN (MNI) – European Central Bank Governing Council member Jens
Weidmann again rejected the idea of giving the European Financial
Stability Fund (EFSF) a bank licence, according to a newspaper interview
published Sunday.
“That would be like turning on the printing presses for state
finances and that would be in my view a fatal path to take,” Weidmann,
who is the president of the Bundesbank, told German weekly Bild am
Sonntag (BamS).
Weidmann also warned in the interview of the risk of leveraging of
the EFSF to increase its financial firepower, “with the size of the
leveraging obviously the size of the risk rises,” he said.
The sovereign debt crisis in the Eurozone cannot be solved by
permanently increasing the size of the rescue fund, he argued.
German Chancellor Angela Merkel and French President Nicolas
Sarkozy promised Sunday that they were moving toward a comprehensive
solution of the Eurozone crisis but said more work was needed to
conclude the package in time for another Eurozone leaders’ summit on
Wednesday.
The German and French leaders said the options for leveraging the
EFSF had been narrowed to two, but they declined to provide any detail.
Both of them said the ECB would not be involved in either plan.
–Berlin bureau: +49-30-22 62 05 80; email: twidder@marketnews.com
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