BERLIN (MNI) – The German finance ministry on Monday reaffirmed its
position that the EU’s permanent bailout fund, the European
Stabilisation Mechanism (ESM), could come into effect before the
currently planned date of mid-2013.
If the Eurozone member states were able to ratify the ESM before
July 2013 “it would be nice,” finance ministry spokesman Martin Kotthaus
said at a regular press conference here.
Finance Minister Wolfgang Schaeuble said over the weekend at the
margins of the IMF/World Bank meeting in Washington that if the ESM were
to become effective earlier, “we would have nothing against it.”
German weekly Der Spiegel reported on Sunday that the finance
ministry was looking to start the ESM as early as next year.
Chancellor Angela Merkel told Germany’s ARD public television that
only the ESM will allow an orderly insolvency of Eurozone member states.
“I don’t rule out at all that at some point we will have to ask whether
one can do a state insolvency just like with banks,” Merkel said.
Regarding the European Financial Stability Facility (EFSF),
Kotthaus said today he expects that all parliaments of the Eurozone
member states will have approved the expanded authority and
already-planned increase of the fund by the start of October. Beyond
that the finance ministry sees currently no need for further stepping up
the EFSF, he added.
However, a European Commission spokesman said today that the
Commission was mulling another funding increase for the EFSF.
Many observers have questioned whether the EFSF can possibly
perform all the new functions for which it will be empowered — buying
distressed sovereign bonds, recapitalizing banks and providing
pre-emptive financing to countries in trouble — if it is limited to the
currently planned size of E440 billion.
–Berlin bureau: +49-30-22 62 05 80; email: twidder@marketnews.com
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