Germany’s ruling parties are to introduce a resolution in parliament blocking any further boost to the EU’s bail-out machinery, vastly complicating Greece’s rescue package and risking a major clash with the International Monetary Fund.
“European solidarity is not an end in itself and should not be a one-way street. Germany’s engagement has reached it limits,” said the text, drafted by Chancellor Angela Merkel’s Christian Democrats and Free Democrat (FDP) allies.
“Germany itself faces strict austerity to comply with the national debt brake,” said the declaration, which will go to the Bundestag next week. Lawmakers said there is no scope to boost the EU’s “firewall” to €750bn, either by increasing the new European Stability Mechanism (ESM) or by running it together with the old bail-out fund (EFSF).
The tough stance reflects popular disgust in Germany at escalating demands. Bowing to pressure, Chancellor Merkel’s office said an increase in the ESM was “not necessary” since Italian and Spanish bond markets have recovered.
[More]
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Afternoon Updates:
12:03 pm EST, February 24th, 2012 — Canada won’t back more IMF firepower at G20
12:05 pm EST, February 24th, 2012 — Germany Isolated over Resistance to Expanding Euro Bailout
12:07 pm EST, February 24th, 2012 — Treating China as an enemy
12:09 pm EST, February 24th, 2012 — Oil price rises above $124 a barrel
12:12 pm EST, February 24th, 2012 — Rising Energy Prices Endanger German Industry
12:14 pm EST, February 24th, 2012 — HMRC launches tax evasion task force
12:15 pm EST, February 24th, 2012 — Europe Faces Firewall Pressure as G-20 Debates IMF Role
