FRANKFURT (MNI) – The newly proposed European permanent crisis
mechanism is only for future debts and does not cover current
obligations, German Finance Minister Wolfgang Schaeuble underlined
Friday.
Rejecting claims that the involvement of private investors in such
a program unsettles markets, Schaeuble told the European Banking
Congress here that clarity on the crisis mechanism “will calm markets.”
The Basel III banking regulations strike “the right balance”
between the need for tougher capital ratios in the banking sector and
allowing the banking sector to finance the real economy, he argued.
The European Financial Stability Facility is an important
contribution to stability, but is temporary, Schaeuble assured. The
proposed permanent crisis mechanism “is an instrument of the future…it
does not apply to current debt.”
“What is decisive is that at the G20 level, the European level, the
national level that we do not lose the momentum that the progress we
have made” on financial reform, Schaeuble said.
Despite higher German tax revenues than projected, the minister
insisted that it would be a mistake to abandon the path of budget
consolidation.
Issuing Eurobonds would be “against the basic structure of the
European currency,” Schaeuble argued, rejecting what his Greek colleague
George Papaconstantinou said earlier in the day.
–Frankfurt bureau, +49-69-720142, tbuell@marketnews.com
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