Merkel deflects calls for bigger EuroZone Firewall
German Chancellor Angela Merkel deflected pressure Wednesday to increase the eurozone's rescue fund, saying the Key to reassuring markets was to restore lost trust in governments' policies.
She also said closer European integration would eventually bring a solution to the 17-Nation currency area's debt crisis. We must be ready to dare more Europe, she said.
Delivering the keynote address to the annual World Economic Forum meeting in Davos, Merkel questioned the rationale of those in financial markets, governments and the IMF who were pressing Berlin to put more money on the table, but did not rule it out.
International Monetary Fund (IMF) Managing Director Christine Lagarde called in Berlin this week for the 17-Nation currency bloc's financial firewall to be effectively doubled by combining a temporary and a permanent rescue fund to reach 1-T Euros.
Now they say... 'it should be twice as big', Ms. Merkel said.If it were twice as big, we would believe you'. Some say 'it should even be 3 times as big, then we would really believe you.' And I always ask myself how long is that credible and when is that no longer credible. What we do not want in Germany is a situation in which we promise something we cannot back up in the end because if Germany... promises something that cannot be kept if markets attack it hard, then Europe is really vulnerable.
EU officials say they expect Berlin to agree in March to let the existing European Financial Stability Facility, which still has about 250-B Euros in uncommitted funds, and the future 500-B Euro European Stability Mechanism to run in parallel. Ms. Merkel did not comment on that idea.
Paul A. Ebeling, Jnr.
Paul A. Ebeling, Jnr
Paul A. Ebeling, Jnr. writes and publishes The Red Roadmaster's Technical Report on the US Major Market Indices, a weekly, highly-regarded financial market letter, read by opinion makers, business leaders and organizations around the world.
Paul A. Ebeling, Jnr has studied the global financial and stock markets since 1984, following a successful business career that included investment banking, and market and business analysis. He is a specialist in equities/commodities, and an accomplished chart reader who advises technicians with regard to Major Indices Resistance/Support Levels. www.livetradingnews.com