Berlin attacks European Commission chief

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Germany's finance minister had sharp words on Monday for European Commission President Jose Manuel Barroso, saying he was complicating the euro crisis with calls to boost a rescue fund.

"Isolated proposals do not make the situation any easier, but rather more complicated," Wolfgang Schaeuble told Deutschlandfunk radio ahead of talks with other eurozone finance ministers in Brussels.

The German minister reiterated Berlin's position, saying he saw "absolutely no reason in the short term to debate" an increase in the size of the European Financial Stability Facility (EFSF).

The 440-billion-euro (585-billion-dollar) fund -- 750 billion euros with International Monetary Fund and European Union contributions -- was set up in 2010 to help struggling eurozone states after Greece needed a bailout.

Ireland has since tapped it and there are fears that Portugal, Spain, Belgium and even Italy might need assistance too, and that the fund would lack the necessary firepower.

Barroso called last week for the fund to be enlarged and has urged eurozone countries to move faster on the issue. He has not hesitated to tell Berlin what he thinks it should be doing.

"I expect top German politicians to respect the role of the Commission. We in the Commission have not only the right, but also the duty, to tell Europe's citizens what we think is right," he told Germany's Spiegel magazine.

Helping Greece and Ireland was deeply unpopular among German voters and Chancellor Angela Merkel is wary of being seen to stump up even more money ahead of seven state elections this year, the first on February 20.

Because funds must be kept in reserve to maintain a top credit rating and obtain low interest rates, the EFSF's effective lending capacity is more like 250 billion euros.

Schaeuble said last week that the eurozone should look at boosting this capacity without increasing the size of the overall fund.

"It is not a question of increasing or augmenting but of ensuring that the amount agreed to in May is in fact available," the minister told Deutschlandfunk on Monday.

Schaeuble said he had no objection to thinking "in the medium term" about changes to the programme, which is supposed to be replaced by a permanent mechanism in 2013.

A survey of 250 firms in Germany published on Monday showed 57 percent in favour of the fund being enlarged, even if this cost Germany more.

Forty-one percent of the companies, mostly small and medium-sized "Mittelstand" firms, were opposed, the poll by management consulting firm Kienbaum showed.

It also found 60 percent of firms in favour of Brussels having more power in member states' fiscal and economic policy.

© 2011 AFP

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