Germany 'can't bear the load for all of Europe': minister

28th November 2011, Comments 0 comments

Germany on Monday hit back at those calling for the country to ride to Europe's rescue, with Finance Minister Wolfgang Schaeuble saying Berlin could not carry the burden for the whole continent.

"No European country would retain its triple-A rating" if the European Central Bank were to become lender of last resort or if eurobonds were to be introduced, Schaeuble told the foreign press association in Berlin.

"Even Germany is too small to shoulder the entire burden for the whole of Europe or for the whole (euro) currency area," said the minister.

There have been appeals from around the world for Germany either to contribute more heavily to the eurozone rescue fund or to backtrack on its opposition to pooling debt within the 17-nation euro zone.

Berlin is also blocking what many see as the most powerful solution to the eurozone crisis -- allowing the ECB to intervene more forcefully on the bond markets to bring down member states' borrowing costs.

Top EU officials were expected to come under renewed pressure to solve the crisis as they visited the White House later on Monday for an EU-US summit.

Despite the air of doom and gloom, Schaeuble was relatively optimistic that Europe could get its act together to solve the crisis.

Asked how long the crisis would last, Schaeuble said: "Ah, not so long. We just need to convince the markets that the euro will emerge stronger from this crisis than it was at the beginning."

Schaeuble's comments came hours after Chancellor Angela Merkel's spokesman warned that Germany's pockets were not so deep and it had its own debt concerns.

Speaking at a regular government news conference, Steffen Seibert said: "Germany has solidarity with its European partners and has already deployed enormous resources. But we also have debt to deal with.

"We are on a good path to doing this ... but we too do not have unlimited financial resources," added Seibert.

Germany is "sceptical about the several calls for Europe to deploy the last big financial reserves, what in the Anglo-Saxon world is known as the bazooka," said Seibert.

"We in Europe can't pretend we have financial means that we don't really have ... we are strong in Europe. Germany is strong but we are not strong to an unlimited degree. That is true also for the federal republic," he added.

There was "no other solution than the one the federal government is arguing for," he said, insisting that eurozone countries must concentrate on reducing their debt, cutting spending and boosting their economic competitiveness.

Seibert also reiterated Berlin's denial of an earlier press report that Germany was open to pooling the sovereign debt of the six countries with a top AAA credit rating.

"Not the least of our problems in Europe are the constant rumours" about possible solutions to the crisis, he said.

Schaeuble also dismissed the story as "totally made-up."

Merkel will give a speech in parliament on Friday to set out Germany's position on the crisis ahead of a summit of European Union leaders in Brussels on December 8 and 9, her spokesman said.

Germany is making major efforts to bring down its budget deficit but is still grappling with a debt of more than 80 percent of its gross domestic product, well above the EU limit of 60 percent.

© 2011 AFP

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