EU fund chief says there's enough cash to go round

25th November 2010, Comments 0 comments

The head of the European Union's multi-billion-euro (dollar) bailout fund sought Thursday to allay fears the money could run out if the Irish debt crisis spreads to other eurozone nations.

Speaking to Germany's biggest daily Bild, Klaus Regling said: "The safety umbrella would be big enough for everyone" although he also stressed: "The fact is that only Ireland has asked for help."

Asked whether there was a danger of the eurozone collapsing because of the debt crisis, Regling was firm. "The risk is zero," he said.

"It is unimaginable that the euro could fail. No country would leave the euro of their own free will -- for weak countries, it would be economic suicide and for the strong countries too."

However, the 60-year-old German acknowledged that "there is some uncertainty as to whether the crisis could spread to other countries."

In recent days, there have been fears of contagion in other eurozone nations such as Portugal and even the far larger Spanish economy, which has come under pressure on the markets.

On Wednesday, Ireland unveiled a 15-billion-euro austerity package required to unlock an international bailout reportedly worth 85 billion euros, slashing public sector pay and pensions but refusing to raise corporate tax.

Regling said he "in no way" believed the crisis could spread to European heavyweights Italy and France.

"Italy has come through the crisis well and has got its public deficits under control. And France has the same credit rating as Germany," he said.

The EU put together a 500-billion-euro rescue fund to help other countries after Greece had to be saved from default with a 110-billion-euros package in May. The IMF contributed another 250 billion euros to the rescue fund to make it worth a trillion dollars in all.

Late Wednesday, the powerful head of the German central bank said that European countries would not allow a speculative attack on the euro and would increase the fund if necessary.

"If that amount is not enough, we could increase it," Weber said in Paris. "An attack on the euro has no chance of succeeding."

© 2010 AFP

0 Comments To This Article