Germany's Refusal to Boost $966 Billion Euro Rescue Fund May Be Weakening
Germany may be softening its opposition to expanding the 750 billion-euro ($966 billion) rescue facility for indebted euro nations as investors question Portugal’s ability to avoid tapping the fund. Air Jordan 11 European Union leaders may discuss expanding the fund at their next summit in February, the Handelsblatt newspaper reported today, citing German government officials it didn’t identify. Der Spiegel magazine said the EU could time such a pledge to coincide with granting aid to Portugal. With Portugal due to sell debt on Jan. 12 and Spain on Jan. 13, attention is shifting back to whether Europe is doing enough to stem the crisis. Chancellor Angela Merkel has up to now opposed expanding government-funded aid for debt-plagued euro nations, saying as recently as Dec. 6 that she sees no need for additional aid. UGG Boots Bailey Button “No decision has been taken about widening the rescue fund,” Steffen Seibert, Merkel’s chief spokesman said by telephone yesterday when asked whether her policy remains the same. “We should note that only a small part of the available funds has been tapped.” France and Germany will push Portugal to accept aid as officials in the two countries doubt the Lisbon government can raise money on capital markets much longer, Der Spiegel reported Jan. 8 in a preview of an article in this week’s edition. All Means Necessary Aid for Portugal should coincide with an agreement by the euro-area countries to provide all means necessary to safeguard the monetary union, including unlimited funds to expand the bailout facility if required, the Hamburg-based weekly said. Seibert denied that Merkel is pressing Portugal to tap the rescue fund, saying Germany’s aim is to ensure that Prime Minister Jose Socrates persuades markets he is pursuing budget discipline. UGG Boots Argyle Knit “What’s important is that governments take sustainable steps toward more stability and competitiveness, and that the markets recognize that,” Seibert said. The yield investors demand to hold Portuguese government bonds over similar-maturity German bunds rose last week as the country seeks to persuade investors it can narrow its budget gap and avoid following Greece and Ireland, which were forced to accept EU bailouts last year. “Markets won’t stay at these levels because that’s just not sustainable and if they widen much further, then we’ll soon have rescue packages for Spain and Portugal,” Erik Nielsen, chief European economist at Goldman Sachs Group Inc, said in a research note yesterday. “All the mechanisms are in place” to help Portugal if it asks for aid, German Finance Ministry spokesman Tobias Romeis said in a telephone interview. Cheap Jordans