German Finance Minister Wolfgang Schaeuble Friday reiterated his opposition to asking euro zone governments to step up their commitments to the region's bailout fund and said the European Central Bank should not be used to finance cash-strapped governments.
Heading into talks with his euro zone counterparts, Schaeuble said he hoped for an agreement on "an efficient mechanism for a new EFSF," or the European Financial Stability Facility. At present the bailout fund is backed by EUR440 billion in guarantees, with Germany the biggest contributor. "We're sticking with the agreed guarantees. And central banks should not be called upon to finance states," the finance minister said. Euro-zone leaders are looking at ways to increase the fund's financial clout, in particular by leveraging the fund. Schaeuble said the ministers will discuss the next slice of aid for Greece and on how to "ensure" Greece's debt is sustainable. He said "the situation is serious" in Europe.
"We are aware of the unrest in financial markets, and that this is affecting the real economy." And Schaeuble signaled that the effective deadline for a comprehensive solution will be at the Group of 20 summit in Cannes in November