–Adds More Finance Ministry Comments To Story Sent At 07:21 GMT
BERLIN (MNI) – German Chancellor Angela Merkel signaled over the
weekend that she would rather accept a downgrade of the European
Financial Stability Facility (EFSF) than increase German guarantees for
the bailout fund.
The EFSF risks losing its AAA rating after France and Austria lost
their triple-A ratings. They were two of six triple-A rated countries
whose backing enabled the EFSF to maintain its top rating.
Merkel argued that the EFSF could support fiscally ailing Eurozone
member states even if it was downgraded.
“I was never of the opinion that the EFSF necessarily has to be
AAA,” the Chancellor said at a gathering of her center-right CDU in the
northern German town of Kiel. “AA+ is also not a bad rating,” she said.
German Finance Minister Wolfgang Schaeuble also argued that there
is no need to increase Germany’s guarantees for the EFSF, which stand at
E211 billion.
“The guarantees are by far sufficient for what the EFSF will have
to accomplish in the next months,” he told German national radio
Deutschlandfunk (DLF) on Monday.
Finance ministry spokesman Martin Kotthaus said at a regular
government press conference on Monday that there is also no need to
increase the means of the planned European Stability Mechanism (ESM)
rescue fund.
The ESM will be bolstered by direct cash payments of the Eurozone
member states and, thus, will be affected less by rating downgrades of
the member states, Kotthaus explained.
Eurozone finance ministers are expected to finalize next week the
discussions on moving the start of the ESM forward to this year,
Kotthaus said. In the view of the ministry it would be good if the cash
payments to the ESM would be sped up as much as possible, he explained.
–Berlin bureau: +49-30-22 62 05 80; email: twidder@marketnews.com
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