Belgium adds to confusion over boost to bailout fund
Monday 06 December 2010
The Belgian finance minister has hinted that the €750bn (£635bn) EU bail-out fund could be increased, in a further sign of the confusion and discord over the best way to tackle the Eurozone debt crisis.
Didier Reynders said that the facility could be boosted as part of European governments' discussions about creating a permanent rescue fund from 2013.
"If we decide this in the next weeks or months, why not apply it immediately to the current facility?" Mr Reynders said, echoing comments from Jean-Claude Trichet, the head of the European Central Bank (ECB) late last week.
Talks about a permanent rescue mechanism started last month in an effort to allay fears that the debt crises wreaking havoc in Greece and Ireland will spread to larger countries which Europe could not afford to bail out.
With reference to the 2013 fund, Mr Trichet said it is "extremely important that everything is commensurate to the dimension of the challenges", while also calling for a "quantum leap" in fiscal governance to help beat the crisis in confidence whipping through the bond markets.
But suggestions of a boost in rescue funding run directly contrary to the position taken publicly by EU heavyweights Angela Merkel, the German Chancellor, and Nicholas Sarkozy, the President of France.
Despite clear commitment to the creation of permanent crisis mechanism, the German government last month overtly rejected an increase in the fund after comments hinting at an expansion from Axel Weber, the president of the country's Bundesbank. The German finance ministry has also categorically denied newspaper reports that the fund was set to double in size.
Separately, the ECB's Mr Trichet was awarded Germany's prestigious Charlemagne Prize for strengthening European unity at the weekend, for his efforts in steering the eurozone through the current crisis and defending the stability of the currency. The award comes with €5,000 (£4236) in cash and counts Ms Merkel, Bill Clinton and Tony Blair among its past winners.
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