Berlin mulls independent euro rescue fund
The Local · 23 Dec 2010, 11:37
Published: 23 Dec 2010 09:33 GMT+01:00
Updated: 23 Dec 2010 11:37 GMT+01:00
Germany is considering a "European stability, growth and investment fund," according to a government paper seen by daily Süddeutsche Zeitung.
The body would exist side-by-side with the European Central Bank, would benefit from the same independence and would be tasked with helping financially distressed eurozone countries in exchange for strict conditions.
Governments that needed to borrow from the fund would have to put up solid collateral such as gold reserves or private bonds, the newspaper said.
The document said such a fund would have an "unlimited capacity for refinancing" and would be proposed to finance ministers in mid-January.
The German Finance Ministry acknowledged that a plan had been worked on by its staff but said it was not yet government policy.
"The idea expressed in the article is in no way the official position of the Finance Ministry or federal government," it said in a statement.
In addition to Germany, Finland, France, Ireland and the Netherlands are working on proposals. German Finance Minister Wolfgang Schäuble is to discuss the plan with his French counterpart Christine Lagarde on Thursday in Strasbourg, the report said.
The newspaper quoted Lagarde in a separate article as saying: "We will discuss how we can work more closely together."
The EU set up a €750 billion rescue fund with the help of the International Monetary Fund in the fallout from the Greek debt crisis but it runs for only three years.
At an EU summit earlier this month, EU leaders agreed to replace it with a permanent mechanism from mid-2013 but the precise details still have to be agreed upon.
Greece had to be bailed out in May via a €110 billion EU-IMF accord and Ireland followed in late November, this time using funds from the temporary facility.