EU economic chief urges Paris, Berlin to agree

21st October 2011, Comments 0 comments

European Union Economic Commissioner Olli Rehn urged France and Germany to reach agreement on how to beef up the eurozone's bailout fund in a newspaper interview published Friday.

"It is very important that Germany and France cooperate well and progress together," the Finnish commissioner told the Handelsblatt daily newspaper.

Talks paving the way for Sunday's crunch summit of European Union leaders in Brussels have stalled over differences between Paris and Berlin on the eurozone's 440-billion-euro (605-billion-dollar) fund.

The fund, the European Financial Stability Facility (EFSF), is the bloc's primary weapon to stem Europe's debt woes which are threatening to push the world back into recession.

German Finance Minister Wolfgang Schaeuble said Thursday that France and Germany were "completely agreed", but Berlin and Paris acknowledged later in the day that no deal would be reached by Sunday and announced a second summit for October 26.

"We have to pay attention to what the European treaties authorise or not," Rehn said, referring to the basis of the disagreement, how to beef up the fund.

He added that "a direct link between a refinancing by the European Central Bank (ECB) and the EFSF could be difficult".

Such a link, meaning the EFSF would function like a bank which would refinance itself through the ECB, is the option favoured by France, but categorically rejected by Germany.

© 2011 AFP

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