BERLIN (MNI) – European Financial Stability Fund (EFSF) head Klaus
Regling said Thursday the Eurozone will not break up over the current
sovereign debt crisis but rather will emerge in better shape.
“I’ve no doubt that the euro will survive … and emerge stronger
than before,” Regling said at a financial conference here.
Along with better implementation of the EU’s Stability and Growth
Pact and more economic surveillance, there will remain a need for a
crisis mechanism in case of an emergency, the EFSF head said, “with some
private sector involvement to avoid moral hazard.”
German Finance Minister Wolfgang Schaeuble said Wednesday that
reforms are needed to counter moral hazard risks. “In future crisis, the
creditors need to take part in the solutions,” he demanded.
Schaeuble also reaffirmed that Germany will oppose any attempt to
prolong the EFSF beyond 2013. “Anyone who believes that the EFSF will be
prolonged beyond three years is putting our credibility at risk,” he
warned. “We cannot do that.”
The E440 billion EFSF was created earlier this year by EU leaders
to assuage markets at the height of the Eurozone’s sovereign debt
crisis. It would provide emergency loans to EMU states that get into
financial trouble and have no other recourse. Along with a pre-existing
fund of E60 billion and another E250 billion pledged by the
International Monetary Fund, the total available for that purpose would
be E750 billion.
–Berlin bureau: +49-30-22 62 05 80; email: twidder@marketnews.com
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