Report: Berlin to accept bailout fund boost

Report: Berlin to accept bailout fund boost
Photo: DPA
Germany is reportedly prepared to fall in line with the rest of the eurozone and drop its resistance to calls to boost the bloc's bailout funds.

Der Spiegel magazine reported Saturday that Chancellor Angela Merkel and Finance Minister Wolfgang Schäuble plan to yield to eurozone countries keen to combine the temporary bailout fund – the European Financial Stability Facility (EFSF) – with its permanent successor, the European Stability Mechanism (ESM).

European leaders had originally planned for the ESM to replace the EFSF, resulting in a single fund worth about €500 billion.

Now, Der Spiegel claims that Germany will support plans to keep both funds operational, which would pave the way for an agreement on the issue ahead of next weekend’s meeting of eurozone finance ministers in Copenhagen.

It is still unclear how much money might be added to the funds, but the scenarios in play could see the package expanded by over €400 billion.

Berlin’s opposition to topping up the funds was unpopular with its eurozone partners. Finland had also voiced doubts about whether to increase the fund’s firepower, but there are signs that Helsinki’s position could be changing.

Finnish Prime Minister Jyrki Katainen said Saturday that the government was “sceptical” about topping up the ESM, but that it had yet to firm up a “political line” on the issue.

The Local/arp

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