• Germany's news in English

Eurozone to pour cash into stability fund

The Local · 26 Sep 2011, 07:37

Published: 26 Sep 2011 07:37 GMT+02:00

Facebook Twitter Google+ reddit

"We are thinking about the possibility of giving the EFSF (European Financial Stability Facility) greater leverage, to give it greater strength," Rehn told Die Welt.

Expressing concern over the financial strength of eurozone banks, he said: "The current crisis is a serious combination of a crisis in public debt and weaknesses in the financial sector. We cannot solve one without the other."

"We need to shore up repair work in the financial sector with a recapitalization of the banks," he said.

The EFSF was established last year to help shore up debt-ridden countries. Its role is shortly to be expanded in line with measures agreed by eurozone leaders in July, but parliaments in the 17-member bloc must approve the measure and their agreement is by no means certain.

The eurozone had previously agreed to increase the EFSF's lending capacity to 440 billion euros ($591 billion), but Rehn did give any figures on an enlarged stabilization fund.

Despite a massive EU-IMF bail-out, there is growing concern about the possibility that Greece might default on its debt. Since the July meeting, Italy's financial problems have also increased.

Last Tuesday, Standard & Poor's ratings agency lowered its credit rating level for Italy, arguing that a weak coalition was trying to govern an economy with poor growth prospects.

Story continues below…

Two days later the finance ministry lowered its growth forecast sharply. Eurozone finance ministers are due to meet in Luxembourg on October 3.


The Local (news@thelocal.de)

Facebook Twitter Google+ reddit

Your comments about this article

11:10 September 26, 2011 by Englishted
To quote status quo,

"down ,down,deeper and down".
13:47 September 26, 2011 by jg.
"Eurozone to pour cash into stability fund"

They must have not noticed that none of the Eurozone members are awash with cash which could be poured anywhere - all are in debt. They are going to fix a huge debt problem with even more debt. I guess they can just print more Euros - it is not like any EU member states have tried that before and suffered crippling inflation as a result. Oh, hang on a minute.....
17:52 September 26, 2011 by jmclewis
A paper shredder would be just as good of a place to put the money!
04:30 September 27, 2011 by Bill Simpson
The word leverage kind of reminds me of words like radioactive, contagious, terminal, stuff like that. It looks like you Germans are about to get TARPed, like us Americans. Valium works, a little.
12:04 September 28, 2011 by storymann
The German economy depends on exports and in recent years Germany has expanded it's trading partners more than other EU members.

IF the EURO fails

Germany will be faced with a currency that at present would be considered a" safe haven" for investors driving up the value ,similar to the problem the Swiss are experiencing now. This would be disastrous to the German economy (at least the euro gives some currency stability). It is in Germany's best interest to find a solution to the problem, at present only temporary measures will survice until a real solution can be forthcoming. The big question is ,can Germany and other financially stable members afford to do this until the real solution is enacted?
10:01 October 1, 2011 by heyheyhey
The REAL solution is to quit trying to buy time.

There is NO WAY that this situation can be salvaged.

The EU made terrible mistakes by allowing certain governments to join the EU.........now the piper will be paid. Watching this situation is like watching someone hang by their fingernails to a sheer cliff while waiting for a rescue.
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