WORLD
German Leader Agrees to More Bailout Money for Euro Zone Nations
Baku, March 27 (AZERTAC). The European Union took a big step on Monday toward building a financial firewall strong enough to prevent the spread of fiscal contagion to major economies like Spain. The move came after Germany dropped its opposition to bringing the Continent`s total bailout capacity to more than 690 billion euros ( $916 billion). Angela Merkel, the German chancellor, said on Monday at a news conference in Berlin that her government remained determined that a permanent European rescue fund should be capped at 500 billion euros.
But in a big concession, she said Germany would not oppose letting that fund operate alongside a temporary fund that has aided Greece, Ireland and Portugal but still has money to lend.
German officials cautioned that many details needed to be negotiated at a two-day summit meeting of European Union finance ministers that starts on Friday in Copenhagen.
German officials cautioned that many details needed to be negotiated at a two-day summit meeting of European Union finance ministers that starts on Friday in Copenhagen.
But Ms. Merkel`s statement effectively gives the green light to expanding the size of the firewall, as the United States and others have been urging.It also shows renewed determination to shore up the stability of the euro zone while the overall European economy remains fragile and concerns are mounting about the Spanish government`s rising costs of borrowing.
Ms. Merkel and her finance minister, Wolfgang Schäuble, have long opposed expanding the bailout fund any further, as they seek to shield German taxpayers from higher liabilities. There is already widespread discontent among Germans about shouldering most of the cost of rescuing weaker European partners like Greece.