Germany calls for quick EU euro crisis backstop

22nd November 2010, Comments 0 comments

Europe's Irish bailout could calm markets but EU leaders urgently need to negotiate the terms of a permanent safety net to protect the euro, a German minister said Monday.

"The umbrella has been deployed, this shows how important it was to have it," German Deputy Foreign Minister Werner Hoyer told reporters ahead of a meeting of European Union foreign ministers in Brussels.

"It is even more important that we start on a permanent mechanism in Europe during the European summit in December," he said.

Hoyer said he was optimistic that the billions of euros (dollars) available to Ireland "can help to reassure the markets" and give Dublin the "psychological umbrella" needed.

Dublin agreed on Sunday to ask the EU and IMF for a bailout estimated at up to 90 billion euros (123 billion dollars), making Ireland the second eurozone country to be rescued this year since Greece in May.

The Irish state could tap into the European Financial Stability Facility, a crisis prevention mechanism that the eurozone set up in May in the wake of the Greek bailout.

EU leaders agreed last month to turn the EFSF, which expires in June 2013, into a permanent mechanism but divisions have already emerged, notably on the possibility of forcing private investors to take their share of any future losses.

"We need a credible framework to protect ourselves from attacks on our currency (and) ... fully protect it in the future," Hoyer said.

© 2010 AFP

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