BERLIN (MNI) – There exist no plans for an increase of Europe’s
planned permanent rescue fund, the European Stability Mechanism (ESM),
beyond the earmarked E500 billion, a German finance ministry spokesman
said Monday.
Discussions currently underway on the European level “are not about
raising the upper limit of the ESM,” ministry spokesman Martin Kotthaus
said at a regular press conference here.
Rather, Eurozone governments were currently discussing “in which
relation” the ESM stands to the temporary bailout fund European
Financial Stability Facility (EFSF), Kotthaus said.
The spokesman said that European heads of states and governments
had already agreed in December that the ESM and the EFSF will operate
alongside each other for one year until summer 2013.
German weekly Der Spiegel reported over the weekend that German
Chancellor Angela Merkel and Finance Minister Wolfgang Schaeuble are
willing to agree to an increase in the size of Europe’s firewall against
the debt crisis.
Two options are currently under discussion, Der Spiegel wrote. One
option is to combine the ESM’s funds of E500 billion with the E200
billion from the EFSF already earmarked for Greece, Portugal and
Ireland. The other option is to let the ESM and the EFSF operate
together at a full combined capacity of E940 billion.
Under the first scenario, Germany’s share in the firewall would
rise from E211 billion to around E280 billion. Under the second, it
would increase to around E400 billion, Der Spiegel wrote.
The German Finance Ministry said Friday that it expects the
Eurogroup to reach an agreement on the size of Europe’s bailout funds at
its meeting next week in Copenhagen. “We’re quite optimistic that we’ll
find a solution which is acceptable for everyone,” ministry spokesman
Kotthaus said.
–Berlin bureau: +49-30-22 62 05 80; email: twidder@marketnews.com
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