January 12, 2011
EU leaders today called for more effective action to defend the euro by increasing the hundreds of billions in the eurozone's bailout fund and extending the fund's scope to include bond-buying and short-term credit for countries in distress.
The French and German governments dismissed the calls in Brussels as unnecessary. But José Manuel Barroso, president of the European commission, appeared to be picking a fight with Berlin and Paris by insisting on agreement to boost the bailout fund within three weeks.
Although Portugal, tipped as the next country to require a bailout, passed a significant test on the bond markets by raising €1.2bn at a less stringent than expected rate of 6.716%, commission officials insisted that persuasive action was needed to counter market attacks on the weaker members of the single currency. "We need to get this over and done with, to stop this dragging on," said one senior official, amid fears that Spain and Belgium will also need help.
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