Merkel aiming to reschedule euro debt fund payments

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Merkel aiming to reschedule euro debt fund payments

Chancellor Angela Merkel will argue at a key European summit Thursday for Germany's payments into a euro bailout fund to be rescheduled, a government source said, amid domestic criticism over Berlin's contribution.


On Monday, finance ministers from the 17 countries that share the euro struck a deal to set up a €700-billion ($990-billion) permanent fund from 2013, replacing an existing smaller pot for debt-laden economies.

Of this €700 billion, €80 billion would come in the form of cash payments, with the rest being loan guarantees. As Europe's biggest economy, Germany was set to contribute €22 billion in cash to this fund.

Originally, Germany was to provide half of its portion in 2013 and the rest in three installments over three years.

But Merkel has suggested offering five chunks of €4.4 billion over five years, reducing the pressure on the budget in 2013, the year of the next federal election, said a government official who asked not to be named.

EU leaders are poised to agree the exact details at a two-day summit in Brussels starting Thursday.

Christian Lindner, general secretary of the pro-business Free Democrats (FDP), junior partners in Merkel's coalition government, said that the "last word" had not been spoken on Germany's contribution to the bailout fund.

"For the FDP, it seems to weigh too heavily on the German budget," Lindner told mass circulation daily Bild.



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