BERLIN (MNI) – Germany’s Finance Minister Wolfgang Schaeuble said
Thursday that the idea of stepping up the European Financial Stability
Facility (EFSF) is “not realistic,” given that only a fraction of funds
have been used yet.

“There are not even 10% of the fund used up yet,” Schaeuble said at
a briefing for the foreign press in Berlin. Moreover, it does not look
like the means will ever be fully exhausted, he reckoned.

“This is an artificial debate which contributes to unsettling
markets,” Schaeuble criticized. That is why the German government is
“not happy” about demands by European Commission President Jose Manuel
Barroso for an increase of the EFSF’s funding, the minister said.

Yet Schaeuble acknowledged that “one of the questions we’re
discussing at the moment” is how to make the E440 billion in the EFSF
fully available if needed. This might mean that “one needs to step
guarantees…but that is not an enlargement of the EFSF,” he stressed.

Eurozone finance ministers at their Eurogroup meeting next Monday
will likely make no final decisions regarding the sovereign debt crisis,
Schaeuble said.

The minister again reaffirmed the German government’s opposition to
the idea of issuing joint eurobonds as a means to fight the debt crisis.
Interest rate spreads among different countries are needed as an
incentive for Eurozone member states to conduct proper budget policies,
he said.

Chinese purchases of Spanish government bonds are a “sign of
confidence,” Schaeuble said.

Germany wants to work together with China to improve global
governance, the minister said, adding that “this means also that foreign
exchange rates must not be manipulated.”

In other remarks, Schaeuble said the German government thinks a
discussion about who should succeed Jean-Claude Trichet at the helm of
the ECB is “premature” at the moment.

“We’re not taking part in the speculation on the Trichet
succession,” he said. “There exists currently no German candidate
because we think this would be premature,” he asserted.

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

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