February 23, 2012
Ahead of a meeting of G-20 finance ministers in Mexico City, Germany remains adamant in its opposition to an expansion of the permanent euro rescue fund. The IMF and European Commission are concerned that the current size of the European Stability Mechanism won't be enough to quiet markets.
G-20 countries are mounting pressuring this week on Germany to abandon its opposition to expanding the euro bailout fund. "The Europeans need to undertake greater efforts," Mexican central bank chief Agustín Carstens said. Speaking in an interview with the Financial Times Deutschland newspaper, he said that "would lead other G-20 countries to provide greater support to the International Monetary Fund."
The comments come just days before a meeting in Mexico City of G-20 finance ministers this weekend, which Germany's Wolfgang Schäuble will also attend. G-20 countries are pushing for Berlin to boost the "firewall" needed to prevent the Greek crisis from spreading to other countries.
Most euro-zone countries would like to increase the size of the planned permanent euro rescue fund, the European Stability Mechanism (ESM), which is expected to go into effect in July and is currently equipped to provide as much as €500 billion in emergency loans. The existing European Financial Stability Fund (EFSF) still has an estimated €150 billion to €250 billion in funds remaining, and many are calling for those funds to be added to the €500 billion ESM to increase its scope to €750 billion. However, that figure would still fall far lower than the up to €2 trillion many believe is needed to calm markets in the longer term. Germany, however, has argued that unspent money should be funnelled back to the donor states.
More
No comments:
Post a Comment