–Juncker: EU Leaders Want To Make All Of EFSF’s Funds Ready For Lending
–Germany EconMin: EFSF Cld Use Different Int Rates On Debt It Raises
–Press: Regling Proposes EFSF Shld Give Greece Money For Debt Buyback

BERLIN (MNI) – European Union leaders are in agreement not to
increase the size of the European rescue fund for fiscally troubled EMU
states, Eurogroup chairman Jean-Claude Juncker said in a newspaper
interview published over the weekend.

However, EU leaders plan to put the European Financial Stability
Facility (EFSF) in a position to lend all of its E440 billion if
necessary, Juncker, who is also the Luxembourg prime minister, told
Germany’s weekly Der Spiegel.

“On this question there exists a consensus among European heads of
governments: We don’t want to increase the fund, we just want to take
care [to ensure] that it actually reaches its planned size,” he said.

EFSF head Klaus Regling said Thursday that in order to preserve its
‘AAA’ rating the EFSF can currently lend only around E250 billion.

German Finance Minister Wolfgang Schaeuble told German regional
daily Tagesspiegel in an interview published Sunday that the CDU/CSU-FDP
government coalition has agreed to support the plan to make all of the
EFSF’s E440 billion available to borrowers.

German Economics Minister Rainer Bruederle proposed in an interview
with German weekly Welt am Sonntag (WamS), published Sunday, that the
EFSF could use different interest rates on the debt it raises to help
boost its effective lending capacity.

In the Spiegel interview, Juncker offered a rather nuanced opinion
of the proposal by EU Commission President Jose Manuel Barroso for the
EFSF to buy government bonds of fiscally troubled Eurozone member
states.

“It would be wrong to establish taboos, but we should also not ask
too much of the strong countries,” he said.

Der Spiegel reported over the weekend that Regling had proposed a
plan under which Greece would buy back its own debt with money from the
EFSF. According to the magazine, the buy-back proposal received support
at last week’s Eurogroup meeting.

Der Spiegel also quoted an unidentified German finance ministry
official as calling the plan a “good idea.”

On Thursday, Regling said in a radio interview that markets were
too pessimistic on the fiscal situation of Greece.

“Markets are assuming that Greece needs a debt restructuring,” the
EFSF head observed. “But that is not backed by the actual developments,
because the [economic reform] program in Greece is going well.”

“We assume that by implementing these reforms the creditworthiness
of Greece will rise again,” he added.

The German finance ministry on Wednesday firmly rejected media
reports saying that the German government is planning for a
restructuring of Greek debt.

“The finance ministry resolutely denies that the federal government
is planning or working on ways to restructure Greek debt,” ministry
spokesman Martin Kreienbaum said in a statement.

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

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