Germany's Schaeuble says no plan to boost euro rescue fund

26th September 2011, Comments 0 comments

German Finance Minister Wolfgang Schaeuble said Monday that there was no plan to boost the size of the eurozone rescue fund, following comments that fed such speculation.

"We are giving it (the European Financial Stability Facility) the tools so it can work if necessary," Schaeuble said in an interview with rolling news channel NTV.

"Then we will use it effectively but we do not have the intention of boosting its volume."

European Union economic affairs commissioner Olli Rehn had said earlier in a German newspaper interview that the bloc was "thinking about giving the EFSF greater leverage, to give it greater strength."

That statement was amplified by Rehn's spokesman Amadeu Altafaj who later said in Brussels that "the increase of the means at the EFSF's disposal are under discussion."

The role of the fund is shortly to be expanded in line with measures agreed by eurozone leaders in July, but parliaments in the 17-member bloc must approve the measure and their agreement is by no means certain.

The July agreement also increases the EFSF's effective lending capacity to 440 billion euros ($593 billion).

Rehn did not give any figures on an enlarged stabilisation fund.

Asked about comments he made Saturday in Washington saying Germany was not opposed to speeding up the launch of a permanent European rescue fund, planned for 2013, Schaeuble said: "If we had it earlier, it would be good."

But he said legislative approval in all 17 member states would probably require most of next year.

"We will probably need the time we had originally planned," he said.

European leaders decided a year ago to create a European Stability Mechanism to succeed in mid-2013 the EFSF, a three-year emergency fund set up in the wake of the Greek debt crisis.

The ESM would be permanent and more powerful than the EFSF, notably having its own money and the ability to engage in debt restructuring.

"The ESM is better in every way," Schaeuble said. "It is the permanent solution."

© 2011 AFP

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