BERLIN (MNI) – The German government opposes the idea of combining
the firepower of the preliminary bailout fund EFSF and the permanent ESM
next year, a senior government official said Wednesday.
“We will rest in any case below the upper limit of E500 billion”
currently foreseen for the ESM, the source explained.
The government is also against giving the ESM a bank licence, the
official stressed: “We believe that this would lead us completely in the
wrong direction.”
However, European leaders at their summit on Thursday and Friday
will talk about how to increase the funds of the IMF to counter the debt
crisis, the source said.
“The IMF funds will be discussed, but I’m not sure if there will be
a decision already this weekend,” he said.
Chancellor Angela Merkel will push at the summit for the
German-Franco proposals, which include more automatic sanctions for
deficit violators, the official said. These proposals will require
changes of the EU treaties, he reminded.
However, “I have to state today that in view of an overall
agreement on Thursday and Friday I’m more pessimistic than a week ago,”
he acknowledged.
“From the many talks we had over the recent days, we got the
impression that several actors have not understood the seriousness of
the situation,” the official said. Currently, a majority of EU states do
not back treaty changes, he said.
If an agreement on treaty changes on the EU level cannot be
reached, Germany will try to fix the tougher budget rules at the
Eurozone level, the official said. He stressed that those rules are
indispensable for Germany.
The official said that Germany still opposes issuing joint
eurobonds to fight the crisis and that eurobonds will also not be part
of any compromise at the summit.
–Berlin bureau: +49-30-22 62 05 80; email: twidder@marketnews.com
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