PARIS (MNI) – An enlargement of the European Financial Stability
Facility and an expansion of its mandate to include buying bonds are
among the options now under discussion, French Finance Minister
Christine Lagarde said Friday, confirming recent reports.
“It is not only a question of money,” Lagarde said during her New
Year’s greetings to the press. A “series of instruments” are being
explored to be presented to EU government leaders in March, she
explained. “It’s still too early now” to give details.
Asked whether the fund could augment the ECB’s public
bond-purchasing program or even replace it, Lagarde replied that this
was an “option” under study.
However, the minister stressed that any new policy must also
include the means of shifting from the EFSF to a permanent stability
mechanism and structural measures for better coordination of economic
policies, especially budget policies. “We need much more coordination,”
she said, and also “sanctions” to ensure greater fiscal discipline.
The minister did not say whether she supported a Belgium proposal
to double the size of the EFSF, but rejected the option of an
unspecified enlargement of the fund. “If we were to enlarge it, if it
were necessary,” she said — emphasizing the word “if” — the increase
“must clearly be specified.”
France appears to want to play a mediator role in the discussions
on the EFSF. It is not publicly pushing Germany to make concessions that
could cost taxpayers money, but rather encouraging its primary European
partner towards greater flexibility in the framework of the European
negotiations.
–Paris newsroom +331 4271 5540; e-mail: stephen@marketnews.com
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