–Germany To Support ECB If It Wants Capital Increase, Source Says
BERLIN (MNI) – EU heads of states and governments at their upcoming
summit on Thursday and Friday won’t discuss the possibility of issuing
joint eurobonds to support fiscally ailing Eurozone member states, a
senior German government official said Tuesday.
At their meeting, the EU leaders also won’t address an increase of
the volume of the European Financial Stability Facility (EFSF) nor the
proposal to give the EFSF the right to buy government bonds of
struggling Eurozone states, he added.
“These won’t be topics at the EU Council meeting,” the source
stressed. A lengthening of the repayment term for the financial
assistance granted to Greece “will also not be a topic at the Council,”
he added, noting that this will be decided on the level of the finance
ministers.
However, he said he could not rule out that European Central Bank
president Jean-Claude Trichet could address the possibility of a capital
increase for the central bank at the summit, the official said.
“If the ECB thinks it is necessary to increase its capital, then we
will positively go along with it,” the official announced. “I suppose
the ECB expects that a strengthening of its base will show markets that
it is [sufficiently] capitalized even if it will, for example, buy
further government bonds,” he said.
The main topics of the EU summit, though, will be the adoption of
the future permanent EU crisis mechanism and the necessary EU Treaty
change, the source explained. “I’m confident that both will happen on
Thursday,” he said. The official said he was also confident that EU
leaders won’t make further alterations to the existing crisis mechanism
proposal.
–Berlin bureau: +49-30-22 62 05 80; email: twidder@marketnews.com
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