• Germany's news in English

Berlin says no need to boost euro fund now

The Local · 12 Jan 2011, 17:55

Published: 12 Jan 2011 17:55 GMT+01:00

Facebook Twitter Google+ reddit

After holding talks with Italian Prime Minister Silvio Berlusconi in Berlin, Chancellor Angela Merkel said she was not prepared to discuss immediately increasing a European rescue fund, but was still prepared to defend the euro at all costs.

"Germany will do whatever is necessary," she said.

But at a regular government briefing earlier on Wednesday, Merkel's spokesman Steffen Seibert was more forthcoming about Berlin's reluctance to pony up more cash for debt-stricken eurozone members right now.

"The German government finds at the moment that it makes no sense, and first and foremost that it is unnecessary, to talk about expanding the rescue mechanism," Seibert told reporters. "This is not the time to announce to the world or to discuss publicly whether an expansion might be necessary some day."

He said that just 10 percent of the €440-billion ($570-billion) European Financial Stability Facility (EFSF) had been used so far, bailing out Ireland in late 2010.

"It would be good if there were a period of calm in Europe, if we didn't discuss on a daily basis all possible measures that might be needed in the future," Seibert said.

The temporary fund was created last May to provide cover for countries in financial distress after Greece became the first eurozone country to be rescued from the threat of bankruptcy.

The European Union agreed last month to create the permanent crisis mechanism to replace the EFSF when it expires in 2013.

The temporary fund totals €750 billion when contributions from the entire EU and the International Monetary Fund are added. As Europe's biggest economy, Germany is the biggest contributor, and Chancellor Angela Merkel is wary of alienating voters ahead of seven state elections this year after unease about rescues of Greece and Ireland in 2010.

But analysts have repeatedly warned that the rescue fund needs to be bigger in order to calm nervous markets concerned that the debt crisis could spread to Portugal and even bigger economies like Spain, Belgium and Italy.

Story continues below…

European economic affairs commissioner Olli Rehn said talks were underway with European Union member states on the possibility of increasing the EFSF and its successor, the European Stability Mechanism.

"We must ensure that the financial support mechanisms that were put in place last May are fit for the purpose," Rehn said at a conference on economic governance.

European Commission president Jose Manuel Barroso urged European leaders on Wednesday to give the fund more muscle by their next summit in February.

AFP/DPA/The Local/mry

The Local (news@thelocal.de)

Facebook Twitter Google+ reddit

Your comments about this article

07:39 January 13, 2011 by auniquecorn
Chancellor Angela Merkel said, I will say when I decide to say.....
08:59 January 13, 2011 by storymann
There is no doubt that a rescue will be forthcoming ,but She is hoping that a more equitable way of spreading this out will be in place before this happens..


Berlusconi knows his country will be in line for one...then the number of Euro Zone members that are able to share the burden will be less,and less..

Japan has bought up a lot of debt buy buying the Euro Bombs ,I mean Bonds,this is a big plus..
16:01 January 16, 2011 by anangryman.com
How much more money are you going to shovel out to other countries that are on the brink of collapse in the US the debt is reaching $14.3 trillion, and the printing presses are working overtime, Wikileaks is coming out with swiss banking secrets that are planned to expose 40 US politicans on the take, the corruption needs to be exposed and the multination businesses need to be held accountable for the ultimate destruction they are causing not just to the US, but the entire world...................more at anangryman.com
Today's headlines
Creepy clown scare spreads to Germany
Two of the clowns were apparently equipped with chainsaws. Photo: Pedro Pardo / AFP file picture

Police said Friday five incidents involving so-called scary clowns had occurred in two north German town, including one assailant who hit a man with a baseball bat, amid fears that Halloween could spark a rash of similar attacks.

Student fined for spying on women via their webcams
Photo: DPA

Student from Munich fined €1,000 for spying on 32 different computers, using their webcams to take photographs, or record their keyboard history.

This is how much startup geeks earn in Germany
Photo: DPA

A comprehensive new survey of 143 startup founders shows how much you are likely to be earning at a German startup, from entry level all the way up to sitting on the board.

Man dies after beating for peeing near Freiburg church
The Johannes Church in Freiburg. Photo Jörgens Mi/Wikipedia

A middle-aged man from southern Germany has died after being attacked by a group of men who took umbrage with the fact he was urinating in the vicinity of a church.

The Local List
Seven German celebrities with uncanny doppelgängers
Former Berlin mayor Klaus Wowereit and actor Alec Baldwin. Photo: DPA; Gage Skidmore, Wikimedia Commons

Check out these seven look-a-likes of well known German figures - we admit that some are more tenuous than others...

Israel seeks to buy three new German submarines: report
A Dolphin class submarine. Photo: DPA

Israel is seeking to buy three more advanced submarines from Germany at a combined price of €1.2 billion, an Israeli newspaper reported Friday.

Here’s where people live the longest in Germany
Photo: DPA

Germans down south seem to know the secret to a long life.

More Germans identify as LGBT than in rest of Europe
Photo: DPA

The percentage of the German population which identifies as lesbian, gay, bisexual or transgender is higher than anywhere else in Europe, according to a new study.

'Reichsbürger' pair attack police in Saxony-Anhalt
File photo: DPA.

A "Reichsbürger" and his wife attacked police officers on Thursday, just a day after another Reichsbürger fatally shot an officer in Bavaria.

Five things not to miss at the Frankfurt Book Fair
Photo: DPA

From consulting a book doctor to immersing yourself in an author's world with the help of virtual reality, here are five things not to miss at this week's Frankfurt Book Fair, the world's largest publishing event.

Sponsored Article
How to vote absentee from abroad in the US elections
10 things you never knew about socialist East Germany
Sponsored Article
Last chance to vote absentee in the US elections
How Germans fell in love with America's favourite squash
How I ditched London for Berlin and became a published author
Sponsored Article
How to vote absentee from abroad in the US elections
12 clever German idioms that'll make you sound like a pro
23 fascinating facts you never knew about Berlin
9 unmissable events to check out in Germany this October
10 things you never knew about German reunification
10 things you're sure to notice after an Oktoberfest visit
Germany's 10 most Instagram-able places
15 pics that prove Germany is absolutely enchanting in autumn
10 German films you have to watch before you die
6 things about Munich that’ll stay with you forever
10 pieces of German slang you'll never learn in class
Ouch! Naked swimmer hospitalized after angler hooks his penis
Six reasons why Berlin is now known as 'the failed city'
15 tell-tale signs you’ll never quite master German
7 American habits that make Germans very, very uncomfortable
Story of a fugitive cow who outwitted police for weeks before capture
Eleven famous Germans with surnames that'll make your sides split
The best ways to get a visa as an American in Germany
jobs available
Toytown Germany
Germany's English-speaking crowd