German vice-chancellor rejects bank licence for euro fund

21st October 2011, Comments 0 comments

German Vice-Chancellor Philipp Roesler roundly rejected Friday proposals to grant the eurozone bailout fund a banking licence to enable it to borrow from the European Central Bank.

Roesler, who is also economy minister and leader of the coalition government's junior partner, the Free Democrats, also ruled out raising Germany's 211-billion-euro (289-billion-dollar) contribution to the fund.

"In no way do we want a banking licence to be given to the EFSF (European Financial Stability Fund)," he said in an interview on the German ZDF television channel.

"Colleagues, friends and partners in France want that. But, for us as the federal government, as the coalition overall, that should not be done," he added.

Talks paving the way for a crunch summit of European Union leaders in Brussels on Sunday have stalled on differences over proposals for leveraging the EFSF to give it more firepower.

The 440-billion-euro (605-billion-dollar) fund is the bloc's primary weapon to stem Europe's debt woes which are threatening to push the world back into recession.

"Similarly, the upper limit (of Germany's liability) of 211 billion euros must not be overstepped," Roesler added, referring to Berlin's contribution to the fund in debt guarantees.

"That is Germany's clear position in these discussions with France and our European partners."

The German minister also defended a move to postpone a final decision by EU leaders on how to beef up the fund from Sunday to next Wednesday, adding: "We need all the details."

"Only then can the (parliamentary) budgetary committee fully decide and then the federal government can give its position at the European level," Roesler said.

When the German parliament last month approved the beefing up of the EFSF, it stipulated that its budgetary committee has to approve any further financial changes to the rescue fund.

© 2011 AFP

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