BERLIN (MNI) – The German government has set up a working group
that is looking into ways how to increase the size of the European
firewall against a spread of the debt crisis, the German daily Die Welt
reported Thursday.
One of the discussed ideas is using structured financial products
to leverage the remaining funds in the European Financial Stability
Facility (EFSF), the temporary rescue fund, Die Welt said. However, the
paper cited a source as saying that nothing has been decided yet.
A senior lawmaker from German Chancellor Angela Merkel’s
CDU/CSU-FDP coalition said Wednesday that it would be better to let the
EFSF and the permanent bailout fund, the European Stability Mechanism,
operate alongside each other for a while than to increase the volume of
the ESM permanently above E500 billion.
“This would make more sense than an increase of the ESM,” said
Norbert Barthle, the CDU/CSU’s parliamentary budget speaker.
The German daily Sueddeutsche Zeitung reported Wednesday that the
German government now thought it was conceivable that the EFSF and the
ESM could operate next to each other for a year. Under this scenario,
Germany’s share in the firewall would temporarily rise to E280 billion
from E211 billion.
–Berlin bureau: +49-30-22 62 05 80; email: twidder@marketnews.com
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