Rescue fund debate
January 24, 2011
German Foreign Minister Guido Westerwelle has fanned the flames of a dispute over the size of the European Union bailout fund by harshly criticizing EU Commission President Jose Manuel Barroso.
In an interview with the German business daily Handelsblatt, which appears in the paper's Monday edition, Westerwelle said he found the debate about a possible extension of the lending capacity of the rescue fund "normal," but added that "it's different when people high up in the EU practically impose their demands for a top-up of the rescue fund."
Barroso will meet German Chancellor Angela Merkel in Berlin on Tuesday to drum up support for an extension of the 750-billion-euro ($1 trillion) bailout system, set up last year by the EU and the International Monetary Fund (IMF). Germany is adamant that the fund should not be topped up.
"It worries me that some in Europe seem to want to act as if nothing has happened and think by taking on more debt, they are solving the problem," Westerwelle told Handelsblatt.
Diplomatic power struggle
Westerwelle also snapped back at comments by Luxembourg's Prime Minister Jean-Claude Juncker that the party he leads, the Free Democrats, are populist, saying that EU countries should work on reforms to stabilize the euro instead of playing the blame game.
"Those who want the idea of Europe must act now and modify the rules. That's true European patriotism," he told the paper.
While Barroso on Friday renewed his call for an extension of the EU bailout fund, Germany maintains that a top-up is unnecessary, as only a fraction of the fund's capacity has been tapped into.
Westerwelle also told Handelsblatt that Germany remains opposed to the idea of common European bonds, insisting that each country needs to get its own house in order and that a euro bond would only take the pressure off those countries that "have been fiscally irresponsible" in the past.
Meanwhile, EU Economic and Monetary Affairs Commissioner Olli Rehn said it was in the bloc's own interest to act quickly on stabilizing the euro zone.
"We must agree on common measures as soon as possible - the sooner the better," he told German newspaper Die Welt. "The calming on markets in the last few weeks has given us a bit of breathing space, but there is no reason to lean back now."
Author: Nicole Goebel (dpa, Reuters)
Editor: Martin Kuebler