Berlin opposes any pooling of bailout funds to protect EU
GERMANY HAS rejected as “pointless” ongoing demands to boost the euro zone firewall to protect the single currency bloc against potential shocks.
Ahead of today’s summit in Brussels, Berlin officials dismissed expectations of progress, saying that market concerns about Italy and Spain’s finances were diminishing and, with that, the need to bolster the euro zone’s rescue facilities.
“The question of boosting the bailout funds was always a question of fighting contagion, but if the Greece situation is resolved and we see a simultaneous relaxation on the bond markets for Spain and Italy then, in all fairness, we have to judge the new situation as it is,” said a senior German official.
EU leaders have agreed to discuss next month a proposal to create a total firewall capacity of €750 billion by pooling the eurozone’s temporary (European Financial Stability Facility) and permanent (European Stability Mechanism) bailout funds.
German officials insisted yesterday the planned review was not obliged to make any decision.
Delays over a second bailout for Greece could push final agreement on the bailout capacity into April, officials say. Brussels sources suggest Germany is “isolated”, while Dutch prime minister Mark Rutte said he was confident Germany would decide before the International Monetary Fund’s April meeting.
Luxembourg prime minister Jean-Claude Juncker told the Die Weltdaily that “we will have a decision by the end of March to allow ESM and EFSF to run in parallel”.
Berlin dismissed this yesterday as “Mr Juncker’s position”, but backed his proposal in Die Weltto appoint a special European commissioner for Greece.
“Not a ‘budget commissioner’ but a commissioner, pooling together all the competences of the EU commission concerning Greece,” said Mr Juncker.
Berlin’s earlier call for a “budget commissioner” was shot down by the Greek government.
Besides their current opposition to boosting the bailout fund, German officials restated yesterday their opposition to further measures to stimulate recession-hit euro zone economies.
“Public money has never been a problem in any crisis country, the problem is that it’s never been used in a way that would generate sustainable growth,” said a senior German official. “We don’t think more money is the solution; we have to get away from the idea that we can buy growth.”