Germany rejects EFSF reassessment calls

8th August 2011, Comments 0 comments

Germany Monday rejected calls to boost funding for the European Financial Stability Facility (EFSF) which is meant to help support the crisis-hit common currency.

There are no plans to boost the fund beyond the 440 billion euros ($624 billion) agreed by European Union heads of state and government at a summit on July 21, deputy government spokesman Christoph Steegmans said.

"The EFSF must remain as is," the spokesman told a regular briefing.

Germany is the top guarantor of the fund which was set up in 2010, contributing more than one-quarter of its guarantees which it uses to raise funds on the markets.

European leaders decided on July 21 to widen the fund's remit to allow it to buy back the bonds of eurozone countries in trouble, in addition to providing direct loans to their governments.

The fund is meant to assist the European Central Bank support the euro currency.

Germany's comments followed suggestions by the head of the European Commission Jose Manuel Barroso and by EU economic affairs commissioner Olli Rehn that funding for the EFSF be "reassessed" in view of the current financial turmoil.

© 2011 AFP

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