'No final decision' on EU fund at summit: German source

20th October 2011, Comments 0 comments

No final decision is expected at a crunch summit of European leaders over how to manage the EU's debt bailout fund, a source close to Germany's ruling coalition said on Thursday.

The summit would nonetheless take place on Sunday, the source said, after reports that it could be postponed amid differences between the key players.

"In all probability, there will not be a final decision on the leveraging" of the EU's 440-billion-euro (605-billion-dollar) debt fund, the source said.

Nevertheless, "the summit will take place," added the source.

The source also said that Chancellor Angela Merkel had cancelled a scheduled speech in parliament Friday that was to set out Germany's position ahead of the summit which is supposed to thrash out a solution to the eurozone debt crisis.

"Merkel's speech on Friday has been cancelled because there is still no agreement in Europe on the question of leveraging," the source said.

Earlier Thursday, two German newspapers reported that the summit was hanging by a thread as officials were unable to forge a common position.

European countries are battling over how to boost the firepower of its bailout fund, the European Financial Stability Facility (EFSF).

One option under discussion is to use the cash as insurance for investors on future possible losses on their holdings of bonds issued by weaker member states but there are deep divisions over the best solution.

According to Berlin, France and Germany, long divided on the question, have found a common position.

But the proposal "has not enthused" a certain number of other countries, according to Steffen Kampeter, a senior finance ministry official.

© 2011 AFP

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