September 26, 2011
The German government is considering bringing forward the launch of the planned permanent bailout fund, the European Stability Mechanism, to 2012 from 2013, SPIEGEL has learned. Meanwhile Chancellor Angela Merkel, facing a crucial parliamentary vote on Thursday on the temporary rescue fund, has warned that a Greek default would "destroy the confidence of investors."
The European Stability Mechanism, the permanent bailout fund for the euro zone, may be introduced sooner than planned, SPIEGEL has learned.
According to the German finance ministry, led by Wolfgang Schäuble, the government in Berlin is considering launching the ESM next year, rather than waiting until 2013. If all participating parliaments have ratified the agreement for the new international financial institution, it makes sense for them to start their work immediately, according to the ministry.
An expedited start would have a number of advantages; above all, future calls for collateral in return for aid, as Finland is currently demanding from Greece, would be unnecessary. The ESM will have capital of 80 billion euros (107.4 billion dollars) paid up-front at its disposal to serve as collateral.
In the meantime, a solution for the Finns' controversial demand for security could be on the horizon. They will get their security, but only if they pay their share of the ESM capital, amounting to almost €1.5 billion ($2 billion ) in one go. This possibility would be made available to all the other participating countries as well.
No one in Berlin, however, expects anyone to emulate the Finns. Most countries, including Germany, will pay their contributions to the ESM in five equal annual instalments, as originally planned.
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