BERLIN (MNI) – The EU rescue fund EFSF is ready to support Ireland
if the country asks for financial aid, German Chancellor Angela Merkel
indicated Thursday.

“We have currently again a discussion about Ireland,” Merkel said
in a speech at an insurance industry conference here. “We have a euro
rescue fund and if a country thinks it wants to make use of it, I can
only say that this is what it has been designed for.”

Eurogroup President Jean-Claude Juncker said on Tuesday the
Eurozone has the means and the will to financially assist Ireland, if
the country wants help.

Merkel today reaffirmed that the EU needs a permanent crisis
mechanism after the current rescue fund for Greece and the EFSF run out
in mid-2013.

The chancellor again stressed that her government is “absolutely
convinced that in a future — and I underline this three times so that
all market participants understand it correctly — in a future [crisis]
mechanism also the creditors have to participate in the costs” of
sovereign debt crises.

“It cannot be that the risks are always collectivized and that the
[market] participants don’t carry a share themselves,” Merkel said.

It is important that the rules of such a new permanent crisis
mechanism are decided relatively swiftly “so that no uncertainties arise
on markets,” she argued. “There will arise no uncertainties on markets.”

Merkel argued that at the moment there was a fight underway about
how much power financial markets will get and how much leeway to shape
things will remain with governments.

Next to deficit reduction efforts it is important that economic
policies in the Eurozone are coordinated more strongly, the Chancellor
asserted.

“Only by a stronger coherence of economic strength of the Eurozone
countries and the European [Union] member states overall will we be able
to stabilise the euro,” she argued. “Significant problems and challenges
still lie ahead of us.”

Germany is of the opinion that the exit from the current economic
stimulus measures should now be undertaken relatively swiftly, the
chancellor said. “It is appropriate that Germany and the European
countries altogether now pursue that exit strategy,” she said.

However, she acknowledged that on a global level the right moment
for an exit is still disputed. “We are still speaking with our
transatlantic friends about that,” she remarked.

Merkel argued that the Eurozone “is in a relatively good position
because we have an independent European Central Bank and don’t exert
influence on the interest rate level.”

She then added that somewhat cryptical that “the ECB naturally
orients itself also at large and does not want to, so to speak, produce
disadvantages for Europe, and that is why the interest rate policy
naturally needs a degree of coordination.”

–Berlin bureau: +49-30-22 62 05 80; email: twidder@marketnews.com

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