–Adds Comments By Roesler From Q&A-Session
–Adds Comments By Chancellor Merkel and Danish PM Thorning-Schmidt

BERLIN (MNI) – German Finance Minister Philipp Roesler on Thursday
criticized the purchases by the European Central Bank of bonds of highly
indebted Eurozone member states.

“I dare to doubt that it was smart to take pressure off states [to
consolidate their budgets] by purchasing bonds,” Roesler said in a
speech at a conference here.

He deplored that Germany is regularly outvoted in the ECB Governing
Council on the issue of the bond purchases.

Germany also still opposes the idea of giving the European
Financial Stability Facility (EFSF) a bank licence. Rather, the EFSF
should be leveraged quickly, he said.

However, many EMU member states might be dragging their feet in
agreeing on the technical details for the EFSF leverage in order to
increase pressure on Germany to accept a bank licence for the EFSF,
Roesler suggested.

Germany is worried about recent developments on bond markets,
Roesler said. “We are concerned about the rise of spreads [of bonds]
from states which are actually stable like Austria or the Netherlands,”
he said.

The minister reaffirmed his demand for EU treaty changes which
would allow the European Commission to take stiffer action against
member states violating the deficit rules.

Roesler once again called for the introduction of an orderly
insolvency procedure for states at the European level. He also urged all
member states to introduce debt brakes in their countries similar to
Germany’s.

Speaking at a joint press conference with Danish Prime Minister
Helle Thorning-Schmidt in Berlin, German Chancellor Angela Merkel also
pushed the idea of a treaty change today.

However, Thorning-Schmidt, whose country will hold the rotating EU
presidency in the first half of 2012, said it was important to fight the
crisis now with the existing tools. A treaty change should occur only at
a later stage when the crisis has been tackled, she argued.

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

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