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Euro Zone Divided On Anti-Crisis Plan Before Meeting

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http://uk.reuters.com/article/idUKTRE70D26G20110114

Germany faced mounting pressure from its euro zone partners on Friday to boost a rescue fund for troubled member states after French Economy Minister Christine Lagarde said governments were considering expanding it.

In a sign of significant differences within the currency bloc in the runup to a meeting of its finance ministers next week, Chancellor Angela Merkel's spokesman said the fund set up in May was big enough and sources told Reuters that Berlin was determined to resist increasing it unless the crisis worsened.

Lagarde told a news conference: "The increase in the European Financial Stability Facility (EFSF) is one option which we are looking at, of course."

In response, the German government reiterated that it saw no need to commit more funds to the 440 billion euro (368 billion pound) facility, which has so far been tapped only by Ireland.

"The volume is at the moment absolutely sufficient to fulfil the duties of the rescue fund," said Merkel's spokesman Steffen Seibert.

Senior European sources told Reuters that the sense of urgency in Berlin for boosting the fund had diminished after successful bond auctions this week in Spain and Portugal, the two countries seen most at risk of a bailout following rescues of Greece and Ireland last year.

Instead Germany is pushing for broader anti-crisis measures to be agreed at a summit of European Union leaders in March.

But it must overcome major differences with France to seal what German Finance Minister Wolfgang Schaeuble has promised will be a "comprehensive" new anti-crisis package.

Among the contentious issues, officials say, are France's wish to let the EFSF buy the bonds of vulnerable euro members and Germany's insistence that other members of the currency bloc be forced to introduce legislation similar to the "debt brake" rule it adopted in 2009.

Germany is also against lowering the punitive interest rate the EFSF charges states for its loans, a step other euro zone members believe is necessary to allow struggling economies in the bloc to reduce their debt mountains.

Earlier in the week we had point blank denial that the fund needed more money and now the French are saying it might need enlarging.

It also seems that they want to monetise the debt via the back door by transferring national debt onto the books of a pseudo company.

http://www.efsf.europa.eu/about/index.htm

EFSF is a Luxembourg-registered company owned by Euro Area Member States. It is headed by Klaus Regling, former Director-General for economic and financial affairs at the European Commission.

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  • 284 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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