COPENHAGEN (MNI) – The European Central Bank is satisfied with the
Eurozone’s enlarged bailout fund and expects a boost in International
Monetary Fund resources to follow, ECB Executive Board Joerg Asmussen
member said Friday.

“Recent developments in financial markets confirm that there is no
room for complacency to establish a euro area firewall,” Asmussen said
during a press conference at the Informal Ecofin meetings here.

“In our view, the Eurogroup has today taken a significant decision
to establish European firewalls. We are as the ECB satisfied with the
decision the Eurogroup has taken,” he added.

Earlier today, the Eurogroup decided to boost the firewall to E800
billion. However, of that E800 billion, E300 billion has already been
committed to running programs. The deal might thus be criticized again
for not being powerful enough.

However, Asmussen said, “now we Europeans can travel to the meeting
of the IMF in Washington having done our homework on European
firewalls.” Additional protection should then be built via increased IMF
funds, he added.

Asmussen stressed that “no firewall at all, whatever size it has,
can substitute for reform efforts at the level of member states: a
firewall is no substitute for economic reform.”

Asked about a reaction to Ireland’s promissory note deal announced
on Thursday, Asmussen reiterated the bank’s statement that it had “taken
note” of the deal.

Looking ahead, the ECB expects that “promissory note will be
served according to the schedule that the government has set,” Asmussen
said, repeating almost verbatim the ECB’s statement from Thursday
evening. “As Ireland strives to regain market confidence, it is of the
utmost importance that the commitments of the Irish state are met
according to the standing contracts,” he added.

“I will recall that the Eurosystem has provided unprecedented
support for the Irish banking sector and the intention should be to
reduce over time the reliance of irish banks on central bank funding and
in particular on emergency liquidity,” Asmussen said.

–Frankfurt newsroom +49 69 72 01 42; e-mail jtreeck@marketnews.com

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