BERLIN (MNI) – German Chancellor Angela Merkel again stressed on
Friday that private creditors won’t have to participate in current
rescue measures under the European Financial Stability Facility (EFSF),
which runs until mid-2013.

However, Merkel also reaffirmed that under the new permanent
European Stability Mechanism (ESM), which replaces the EFSF from
mid-2013, private creditors should contribute.

“I want to stress it very clearly, we cannot introduce an
obligatory participation of private creditors during the period of the
EFSF until 2013,” Merkel said at a joint press conference with Eurogroup
chairman Jean-Claude Juncker here.

“However, I want this to be different under the ESM,” the
chancellor explained. “It is important that we have an element which
makes clear that under the ESM private creditors will naturally
participate [in aid measures] in the future,” she said.

Asked if she opposes the idea that the EFSF could hand out loans to
fiscally troubled Eurozone member states so that they can buy back their
own bonds, Merkel said, “I can say neither ‘Yes’ nor ‘No’ to that
today,” adding that a lot depends on the concrete arrangement of such a
plan.

Merkel and Jean-Claude Juncker, who is also Luxembourg Prime
Minister, both appeared confident that European leaders will be able
agree on a comprehensive package to counter the current sovereign debt
crisis when they meet later this month.

“We agree that we have to do everything to make clear that the euro
as our common currency must be a strong currency,” Merkel said.

“Markets are currently calm…and are assuming that we will present
a solid and bulletproof solution before the end of March,” Juncker
added. “We are working on that and I’m confident that we will be able to
achieve that.”

Juncker was also asked about yesterday’s announcement by European
Central Bank President Jean-Claude Trichet that the central bank could
raise interest rates next month.

“I never comment on monetary policy decisions, or monetary policy
announcements or quasi announcements of the ECB,” the Eurogroup head
replied. “The ECB decides in total independence about interest rate
steps and commentary from politicians are not helpful.”

Merkel said she shared Juncker’s view on that topic. The
comprehensive package to overcome the Eurozone’s debt crisis “has
nothing to do with the question of interest rates,” she added.

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

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