Brussels, 14/02/2011 (Agence Europe) - On Monday 14 February, eurozone finance ministers will discuss an in-depth response to the sovereign debt crisis that has rocked the eurozone. The response will be three-pronged - boosting the Stability and Growth Pact, encouraging competitiveness, and creating suitable financial aid systems. At this stage, the ministers will be paving the way for the decisions to be taken by eurozone heads of state at a special summit in Brussels on Friday 11 March. The interest rates charged for Portugal to roll over its debt have again reached a new high. It is now seen as the eurozone country that is struggling the most (not including Greece and Ireland).
Before the Eurogroup meeting, Germany's finance minister Wolfgang Schaüble said that it had to be an over-arching package. In an interview with Italian newspaper La Repubblica the same day, he said that every country must contribute to the solidarity effort according to its means because solidarity is required of all 17 eurozone countries although sometimes one gets the impression that the only countries expected to show solidarity are those that don't cause problems and this was not acceptable.
The negations will also look at an extension to the EFSF's loan capacity. The fund was set up in May 2010 to ensure stability in the eurozone and has already provided aid to Ireland. It is a temporary fund that is only able to raise funding of around half its €440 billion-worth of guarantees provided by eurozone countries. Another issue on the table will be the idea of allowing the EFSF to buy up government bonds or lend to struggling eurozone countries so they can buy back their own bonds at a lower price. Upon his arrival at the Eurogroup, Luxembourg's Finance Minister Luc Frieden said the most important thing was to ensure that the full €440 billion can be used and to give the fund greater flexibility in practice on the markets. He said he thought there would be agreement about these issues.
On Monday, the Eurogroup meeting was open to any country not in the euro for a discussion of the setting up of a European Stability Mechanism to replace the EFSF in the summer of 2013. On Friday 4 March, right-wing European prime ministers (those in the EPP) will be meeting in Helsinki to prepare for the special eurozone summit in Brussels on Friday 11 March. (M.B./transl.fl)