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Merkel sees bigger Greek debt write down

The Local · 21 Oct 2011, 14:02

Published: 21 Oct 2011 14:02 GMT+02:00

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She told members of her conservative Christian Democratic Union and its sister party, the Christian Social Union on Friday, that the time was approaching when one would have to recognise that the agreed write down of 21 percent was not going to be enough, according to members at the parliamentary party meeting.

Thoroughness must be more important than speed in taking measures taken to fight the euro crisis, she said, adding that the measures would have to work.

Finance Minister Wolfgang Schäuble said Europe faced a ‘serious’ crisis as he arrived in Brussels on Friday for talks with his counterparts from other countries ahead of a crunch summit on Sunday.

“We have a great responsibility; we all know it, to Europe, to the eurozone but naturally also to the world economy,” he said.

He said the eurozone crisis was “spilling into the real economy,” and insisted that “we have to come up with a European solution before the G20 summit in Cannes (on November 3 and 4).”

Economy Minister Philipp Rösler, from Merkel’s coalition partner the Free Democratic Party (FDP), stressed said there would be no banking license for the European Financial Stability Facility (EFSF) – a sore point with the French, who had been pushing for exactly this. Such a license would enable the EFSF to borrow money from the European Central Bank.

"Colleagues, friends and partners in France want that. But, for us as the federal government, as the coalition overall, that should not be done," said Rösler. "That is Germany's clear position in these discussions with France and our European partners."

Merkel was at pains to deny one press report on Friday that she was frustrated with French intransigence on this matter. “The French are not moving an inch,” she was reported by the tabloid Bild newspaper as saying to a small circle of people. Yet her spokesman denied she had said such thing.

Rather than differences with the French being the problem – and Merkel’s plans to make a government statement on the matter on Friday were shelved at the last minute – she said that parameters for using EFSF money to help struggling economies were “technically difficult to design.”

Foreign Minister Guido Westerwelle, of the FDP, has proposed his own idea for helping solve the debt crisis in a document seen by the Süddeutsche Zeitung and reported on Friday.

Story continues below…

This would turn the EFSF into a European Monetary Fund with the ability to intervene in unstable countries’ budgets and take over countries’ insolvency processes if they can’t pay off debts, the paper said.

DAPD/AFP/The Local/mdm

The Local (news@thelocal.de)

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Your comments about this article

16:53 October 21, 2011 by berfel
I am sometimes amazed how much money and effort people will spend to keep their old, clapped-out car on the road; one that drinks like a sailor, is slower than a Trabant on a bad day, makes more noise than a Leopard tank, and leaks more than a newborn infant. But it's a passion.

Imagine now, if you could get others to pay to maintain that car. Got it?

Congratulations. Now replace "car" with "euro".
19:07 October 21, 2011 by _JD
At this point defending the Euro is equivalent to defending the European project, which is the only political entity with even a superficial commitment to open civil society and social justice. If not Europe then what - the Chinese model, the US - with 25% youth unemployment and tax breaks for billionaires?

The real problem is not just people's lack of understanding of what is at stake here, but how that creates a climate in which the actions of Merkel are not attacked for what they are - a relentless destructive obstructionism which only deepens the mess, and has done so for 18 months. Helmut Schmidt was right - there is no Euro crisis - just a crisis of European political leadership.
20:58 October 21, 2011 by r2d2c3po
When is the fool going to be thrown out and replaced by someone who actually cares about the average citizen?
21:34 October 21, 2011 by neunElf

We sure do not need that US mess here in Europe do we? 25% youth unemployment, what is it in Spain 40%?

At least the US is replicating itself with population growth, Europe is on a demographic death march to oblivion.
21:38 October 21, 2011 by derExDeutsche

I hope this 'Open' and 'Civil' Society does not in any way resemble the hate that you outwardly display for so much of the Western world.
15:07 October 22, 2011 by storymann
Here is what Mrs. Merkel isn¦#39;t telling her citizens: A Europe in a downward spiral of austerity and recession will buy fewer German exports. A disorderly Greek default and downgrade for Spain, Italy and France could split apart the euro, leaving Germany with a much less competitive exchange rate than it enjoys today. The damage to the European Union, which has smoothed Germany¦#39;s postwar reintegration, would be enormous.
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