Brussels, 23/02/2012 (Agence Europe) - Germany is the only country in the eurozone that does not want to strengthen the European anti-crisis firewall. This firewall could come about through a combined strike force of €500 billion from the future European Stability Mechanism (ESM) and the remaining intervention capacity of €250 billion from the European Financial Stability Facility (EFSF). On Wednesday 22 February, the spokesman for the German government informed Reuters that “the position of the German government has not changed”: such an increase “is not necessary.” This intransigence can be explained by the fact that the Bundestag is being urged to approve the second Greek bailout on Monday 27 February. The inclusion in this debate of a question on strengthening the European firewall, to which Berlin contributes to the most as it is the biggest economy in the eurozone, could have negative effects.
Negotiations on the second Greek programme have barely been completed but two other Triple A countries, the Netherlands and Finland, both supporters of Germany's hard line in the European response to the sovereign debt crisis, have given their support to a combination of the two rescue funds. Dutch Minister of Finance Jan Kees de Jager informed Le Monde that the Netherlands was “prepared to combine the two European funds so that a firewall worth €750 billion could be set up”. He added: “we will see if we can do this in March”. European leaders are expected to tackle this question during the spring summit on Thursday 1 March. Finland considers that enhancing the firewall should take place at the same time as negotiations on increasing IMF resources, indicated the Financial Times.
On Tuesday 21 February, at the end of the Ecofin Council, EU Commissioner for the Euro Olli Rehn emphasised that developed and developing countries would not increase their contribution to IMF resources unless the Europeans increased their financial firewall first, to prevent any debt crisis contagion (see EUROPE 10558). On Thursday 23 February the commissioner indicated that since last autumn they had been launching the same justified appeal for a substantial strengthening of the European firewall required for preventing contagion and restoring confidence on the financial markets. He made this statement whilst presenting the European Commission's spring economic perspectives (see other article). According to the commissioner, the decision to move forward to July 2012 for the entry into force of the ESM, as well as the payment of the capital required, already means that progress is being made. (MB/transl.fl)