–Merkel Says Judges Have All The Time They Need For Ruling: Press
–EFSF Regling Says States Could Avoid Liability For Bank Aid: Press
–EFSF Bank Aid Program For Spain Could Run Until 2028: Press

BERLIN (MNI) – Eurogroup chairman Jean-Claude Juncker does not
expect that the German Constitutional Court will block Europe’s planned
permanent bailout fund ESM, he said in an interview with the German
weekly Der Spiegel published Sunday.

Juncker noted that constitutional questions had also been raised in
other Eurozone countries: “In Estonia the rescue fund was examined by
the highest court and was confirmed. Therefore, I do not expect the
judges in Karlsruhe to block it.”

The Eurogroup head criticized, though, that it is “not helpful”
that the German Constitutional Court has signaled that it might take
until autumn before it will deliver a first ruling.

German Chancellor Angela Merkel in an interview with German ZDF
public television on Sunday defended the court. “The judges at the
Constitutional Court will take all the time they believe they will
need,” she said.

Meanwhile, the CEO of Europe’s current temporary bailout fund EFSF,
Klaus Regling, told German weekly Welt am Sonntag in an interview
published Sunday that Eurozone member states will not be liable for
fiscal aid given directly to their banks once there exists joint banking
supervision in Europe.

“If there exists a real banking supervision by the ECB, then it
would be possible that we give loans directly to banks and not hand them
over via the government as we do currently,” Regling explained. “Then
the country isn’t liable.”

Merkel stressed in the ZDF interview that the current fiscal aid
from the EFSF to the Spanish banking sector would still be handed out
via the Spanish government and that the country would be liable for it.

Der Spiegel reported on Sunday that the EFSF aid program for Spain
is to run until 2028 the latest. The magazine cited a confidential
proposal by the EFSF leadership.

According to the magazine, the first aid tranche for Spain of E30
billion is to be paid out at the end of the month. Of that, E20 billion
would go toward shoring up short-term bank finances, while another E10
billion would be reserved as a “longer-term emergency buffer.”

A second tranche of E15 billion is due for mid-November. At the end
of December a third tranche of E15 billion is to be paid out. The last
tranche of E15 billion would come next June, Der Spiegel wrote. Up to
E25 billion would flow into a so-called “bad bank” to buy up
“problematic debt”.

The fiscal aid from the EFSF is not to be accounted as Spain’s
public debt so that the country will preserve its access to capital
markets, Der Spiegel wrote.

–Berlin bureau: +49-30-22 62 05 80; email: twidder@marketnews.com

[TOPICS: M$X$$$,MGX$$$,M$$CR$,M$G$$$,M$S$$$,MT$$$$,MFX$$$]