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Merkel to hike EU rescue fund

November 21, 2012

German Chancellor Angela Merkel appears leaning toward an increase in the eurozone rescue fund and lower interest rates in efforts to shore up Greece. The chancellor is confident that a deal may be struck on Monday.

https://p.dw.com/p/16nH7
Angela Merkel Foto: Tobias Koch/dapd
Image: dapd

Merkel told a closed-door meeting of her conservative lawmakers on Wednesday that an increase in guarantees provided under the EU rescue fund could help Greece plug its medium-term funding shortage.

The German chancellor suggested an increase by 10 billion euros ($12.8 billion) of the European Financial Stability Facility (EFSF), parliamentary members of her Christian Democratic Union (CDU) party told news media in Berlin.

Under the plan, the additional funds should be provided for the debt-wracked country to be able to buy back government bonds, thus lowering its debt burden.

In addition, CDU lawmakers said Merkel appears to be leaning toward a sizeable reduction in the interest rates that Greece pays for loans, and added that a combination of both options would likely be proposed by Germany at the upcoming meeting of EU finance ministers on Monday.

On Wednesday, after an all-night negotiating session, EU finance ministers said they had failed to reach agreement on a new round of aid for Athens because as participants were at loggerheads about how finance a two-year debt relief program for Greece.

Also on Wednesday, Angela Merkel told German parliamentary lawmakers that she saw chances to get a solution on Monday. But Merkel said that people's "longing for one miracle solution" wouldn't be fulfilled as there was a need to proceed step by step on the Greek debt crisis.

uhe/mz (dpa, Reuters)