BERLIN (MNI) – German Chancellor Angela Merkel and her Finance
Minister Wolfgang Schaeuble are willing to agree to an increase in the
size of Europe’s firewall against the debt crisis, German weekly Der
Spiegel reported over the weekend, citing government sources.
According to the magazine, Merkel and Schaeuble agreed that the
temporary rescue fund, the European Financial Stability Facility (EFSF),
and the permanent bailout fund, the European Stability Mechanism (ESM),
could be “maintained operational” simultaneously during a transition
period.
Under the original plan, the ESM was to replace the EFSF in July
2013. That date was later moved up to July of this year.
It remains unclear, however, by how much the firewall is to be
increased. Two options are currently under discussion, Der Spiegel
wrote. One option is to combine the ESM’s funds of E500 billion with the
E200 billion from the EFSF already earmarked for Greece, Portugal and
Ireland. The other option is to let the ESM and the EFSF operate
together at a full combined capacity of E940 billion.
Under the first scenario, Germany’s share in the firewall would
rise from E211 billion to around E280 billion. Under the second, it
would increase to around E400 billion, Der Spiegel wrote.
The German Finance Ministry said Friday that it expects the
Eurogroup to reach an agreement on the size of Europe’s bailout funds at
its meeting next week in Copenhagen. “We’re quite optimistic that we’ll
find a solution which is acceptable for everyone,” ministry spokesman
Martin Kotthaus said.
Meanwhile, German weekly Welt am Sonntag (WamS) over the weekend
quoted from a not yet published report by the so-called troika — the
European Central Bank, European Commission and International Monetary
Fund — saying that Portugal is on track to receive its next bailout
payment of about E15 billion from the EFSF.
“Portugal has its program fully on track,” WamS quoted ECB
Executive board member Joerg Asmussen as saying.
–Berlin bureau: +49-30-22 62 05 80; email: twidder@marketnews.com
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