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Merkel bows under pressure to up bailout

The Local · 1 Mar 2012, 10:54

Published: 01 Mar 2012 10:54 GMT+01:00

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The chancellor had previously opposed the move, but many non-euro countries, such as the United States, Britain, Japan and China have increased pressure for an expansion of the package.

“We will not be able to resist this pressure in the long-run,” Merkel said. If the package were to be expanded, Germany would be set to pay €280 billion into the fund. The country’s current share is €211 billion.

The European Financial Stability Facility (EFSF) is designed to help euro countries in serious financial trouble. The newspaper said Merkel is now thinking about raising the top credit limit from €500 billion to €750 billion. The final decision is expected to be made at the end of March.

The EFSF currently has €500 billion. Of that about half is available to be loaned out. This summer the EFSF is to be replaced by the European Stability Mechanism (ESM), which will have the ability to lend as much as €500 billion.

Public opinion in Germany has grown increasingly hostile to the bailouts, an attitude reinforced by negative media reporting. The perception that hard-working Germans are paying for the fecklessness of southern Europeans has become widespread.

German anti-Greek rhetoric has fuelled a rise in anti-German sentiment among Greeks, a country bordering on bankruptcy that has been a key target of EFSF funds.

The Süddeutsche Zeitung said due to Germany’s previous resistance to increasing the fund, European leaders are not expected to discuss the fund’s size at their meeting in Brussels Thursday and Friday. A final decision will most likely be made in April.

Germany is calling for the IMF to increase its fund for crisis management to $600 billion. Other IMF countries, such as the UK, have said they are only willing to agree to this if Merkel signs off on a higher euro stability fund package.

Story continues below…

The Local/mw

The Local (news@thelocal.de)

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Your comments about this article

13:57 March 1, 2012 by Englishted
So the U.K. has to pay into the IMF ,but is not allowed a say in where the Eurozone countries throw that money away.
18:21 March 1, 2012 by Bavaria Mike
This woman is out of control! Hailed and influenced by every country but her own. This is my tax money going into the European welfare system and let's not forget all the local sponges already in the country! How about a freakin tax break or maybe have some of those Hartz vier people come over to my house and chop some firewood, I have a wood splitter so it wouldn't be considered cruel work. I do not want to see this woman do a third term and can only hope we get a set of balls back in office! This crap of being swayed wherever the wind blows has got to stop.
22:28 March 1, 2012 by rugbycoach
She might find it difficult as it is unconstitutional to pay more than the 211M. She cant just do what she wants..She has to answer to the constitution.
22:55 March 1, 2012 by pigsnuck
By my calculation, that adds up to 3,500 EUR that every man, woman and child in Germany must pay for the fund.

Why not tell the banks who lent money to Greece to eff off, let Greece go bankrupt like they want to, and let them leave the common currency and stabilise. It's the banks who should lose, not taxpayers. They took the financial risk and lost, but now we are footing the bill.
05:38 March 2, 2012 by derExDeutsche
Ha. I used to come to theLocal.de just to read and reply to all the dimwit ninnies. But lately, I'm getting a little lonely, everybody's posts makes such good sense. I may need to find a new home where the muttonheads still roam.
09:04 March 2, 2012 by losenot@facebook.com
I had a vision today of a total economic collapse, storms and riots in the whole of Europe. The Lord showed me in a dream today. Europe should repent and turn back to God !!! People need to pray about this.
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