German Fin Min Urges Mid-2012 ESM Implementation
BERLIN -- German Finance Minister Wolfgang Schaeuble is reiterating calls for Europe to implement its permanent stability fund by mid-2012 to ensure a containment of the euro-zone sovereign debt crisis by the end of next year, German daily Handelsblatt reported Friday.
"This would be the strongest signal that the euro-zone's member states stand by their common currency in all circumstances," said Schaeuble. "But I'll say it again: Germany is not going to act as the breaks' to solve the crisis by itself, he said.
The 17 euro-zone countries decided at an European Union summit in early December to move up the date for implementing the European Stability Mechanism to mid-2012 from 2013. The ESM will replace the temporary bailout fund, the European Financial Stability Facility.
"The sooner we can collect the EUR80 billion in paid-in capital the better," said Schaeuble of the ESM, which would have a total capacity of EUR500 billion.
Schaeuble warned of a possible future credit crunch for some euro-zone nations, though this difficulty to obtain cheap funds could encourage them to enact more stable fiscal policies.
Higher interest rates "for some sovereign bonds' is "not harmful and can bring [countries] to the understanding that they need to get a grip on the causes of the crisis: debts that are too high and impaired competitiveness," said Schaeuble.
Schaeuble predicted that further concrete steps to stabilize the euro zone would be achieved by the end of 2012.
"We'll be far enough along in the next twelve months that we will have stemmed the fear of contagion and stabilized the euro zone," he said.
(Dow Jones)
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