BERLIN (MNI) – The German Finance Ministry said Friday that it
supports the European Commission in giving Spain more time to meet its
deficit targets.
Spokesman Johannes Blankenheim said at a regular press conference
here that the ministry acknowledges that “due to an unfavorable economic
development it can become difficult” for Spain to meet its deficit
targets.
EU Economics and Monetary Affairs Commissioner Olli Rehn said on
Wednesday that the Commission would be prepared to give Spain an extra
year to reach its budget deficit target, provided Madrid comes up with a
convincing budget plan for 2013-2014 and ensures the country’s regional
governments rein in spending.
Regarding the EU proposal for a “banking union” with a common EU
wide deposit guarantee scheme, Blankenheim said the ministry does “not
see currently how such considerations can be helpful for coping [with
the financial crisis] in the short-term.”
The focus has to be on the implementation of the EU fiscal compact
in Europe now, the ministry spokesman said.
German government spokesman Georg Streiter said the government was
“confident” that it will reach an agreement with the opposition on
ratifying the fiscal compact and the European bailout-fund ESM still
this month.
Since ratification of the fiscal compact in Germany requires a
two-thirds majority in the Bundestag, the lower house, and the
Bundesrat, the upper house representing the 16 states, the government
needs support from the opposition.
Finance Minister Wolfgang Schaeuble reaffirmed last week that the
government wants to ratify the fiscal compact and the ESM together. The
ESM bill needs to be passed this month at the latest because the fund is
to become operative in July.
–Berlin bureau: +49-30-22 62 05 80; email: twidder@marketnews.com
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