Spain, Italy and France will not need support from the euro zone's rescue fund, EU monetary affairs commissioner Olli Rehn said today.
"We don't expect that these countries will need help from the stability mechanism," he said in an interview with Bild newspaper. "They are taking the right measures themselves to get their budgets and economies in order. That is the way to restore and strengthen market confidence."
Mr Rehn also told Bild that he also expects euro zone countries to quickly agree - by September at the latest - to widen the scope of the European Financial Stability Fund (EFSF) that was agreed by EU leaders at a July 21st summit.
Some German lawmakers have warned that this is overly ambitious.
"The parliamentary procedures are different everywhere," Mr Rehn said. "In some countries a ratification is required but in others it's not. But we've got to quickly enact the measures agreed at the July 21st summit - at the latest in September - to put an end to the uncertainties."
Yesterday, the president of the German parliament, Norbert Lammert, poured cold water on the government's plans to have a vote on the EFSF in parliament on September 23rd. Mr Lammert, a leader among Chancellor Angela Merkel's Christian Democrats, spoke out against the government's efforts to rush the measure through parliament.
On Friday, sources said parliamentary groups in Dr Merkel's coalition planned to put the reforms to the euro zone's financial rescue fund to a vote in Bundestag on September 23rd.
The Berlin government - along with governments in Austria, Finland, the Netherlands and Slovakia - have said they are confident their parliaments will approve the July 21st deal by euro zone leaders to widen the scope of the €440 billion EFSF.
Pressure on Dr Merkel to consider bolder crisis steps mounted ahead of a meeting with the French president, with one of Germany's leading economic associations coming out in favour of joint euro zone bond issuance today,
Until now, the idea of so-called "eurobonds" has been fiercely opposed by Berlin, which is fearful such a step would push up German borrowing costs and reduce incentives for weaker euro zone members like Greece to reform their economies.
A German government spokesman was emphatic today - Merkel and France's Nicolas Sarkozy will not discuss common euro zone issuance in Paris tomorrow because Berlin does not think it is a good idea.
"The German government has said on numerous occasions that it does not believe Eurobonds make sense and that's why they will not play any role at tomorrow's meeting," spokesman Steffen Seibert said.
But a deepening of the debt crisis over the past weeks, with big member states like Italy, Spain and even France coming under pressure, appears to be convincing some Germans to reconsider this hardline stance, even if top government officials continue to rule it out.
The president of Germany's BGA export association became the first senior industry head to back the idea, telling Reuters that all other avenues for fighting the crisis had been exhausted.
"What is the alternative?" Anton Boerner said in an interview. "The alternative is the markets attack Italy, then France, we lose our AAA rating and then it's our turn. This is a downward spiral that would lead to a worldwide depression.
"What have we achieved then? We'll end up paying (for the crisis) three times over. This way we pay just once."
The head of the centre-left Social Democrats, Sigmar Gabriel, has also backed the idea of Eurobonds, telling German public television station ARD late yesterday that euro zone countries should be able to raise 50-60 per cent of their funding through such joint issues if they agreed to certain conditions.
Reuters
