European Union finance ministers and officials met in Brussels on Wednesday to discuss plans to deal with the sovereign debt crisis.
Following are highlights of comments after the discussions:
POLISH FINANCE MINISTER JACEK ROSTOWSKI ON DELEVERAGING
Deleveraging is not a way of achieving the required level of capital strength.
The only partial exception, well I wouldn't call them exceptions, the only things that can be set against the amount of capital banks will need to build up by the end of June 2012 is that they can raise this capital also by sale of organised parts of their business or organised lines of business but not by winding down business.
ON FORCEFUL EFFORTS TO STABILISE MARKETS
This is the Polish view but I'm happy to state it quite clearly, it's also important that after those proposals are accepted there should be action taken in an extremely forceful way to ensure stabilisation of the markets in the period that will follow after the council meeting.
ON EFSF LEVERAGING PROSPECT:
I can say that we have a report from Klaus Regling that showed that the situation as far as the EFSF element of the firewall is more optimistic than is often presented in the press.
ON ABILITY OF TREATY CHANGES TO STABILISE MARKET:
It's also my view that on its own the treaty changes that are likely to be proposed will, let me put it this way, they are sufficient in the medium to long run to achieve the stabilisation of markets, the problem is that they are unlikely to be sufficient in the short run because they simply can't be introduced fast enough.
GERMAN FINANCE MINISTER WOLFGANG SCHAEUBLE ON THE GREEK PROGRAMME
I have taken the opportunity to lay great emphasis that the negotiations about a new Greek programme should be concluded this year if possible.
We are prepared to increase the resources of the IMF through bilateral loans. Naturally, the details would have to be discussed. Naturally, it is the central banks in the end.
Bilateral loans are possible in principle. If the IMF wants to widen its freedom to take action by increasing the special drawing rights, then we are prepared to talk about it. But, to be clear, this is about IMF instruments.
ON EFSF LEVERAGING
The extent of the leveraging can only be announced when it in connection with a specific measure.
ON ITALY AND IRELAND
We received the reports about Ireland positively. The Irish programme is in plan.
Following are highlights of comments ahead of the discussions:
BELGIAN FINANCE MINISTER DIDIER REYNDERS ON BOOSTING THE EURO ZONE BAILOUT FUND:
What we are trying to do is to reinforce the means of the EFSF fund. We also probably need to go towards stronger action from the IMF and the ECB.
There are a number of possibilities on the table. For the ECB it is up to the bank to decide, it's the bank that needs to take its decision.
But for the IMF we are working with the IMF to see how to strengthen the action of the IMF and help it maybe through an increase of its means.
It's through the IMF and probably the action of the ECB that we can go further, with the IMF we are negotiating with the ECB. It's up to the ECB to take its decisions.
SPANISH ECONOMY MINISTER ELENA SALGADO ON INCREASING FIREPOWER OF EFSF BAILOUT FUND:
If we can increase the firepower of the fund through bilateral loans and the IMF it would be very welcome. Given the IMF's role to date in Europe, it wouldn't be unreasonable to involve it more.
AUSTRIAN FINANCE MINISTER MARIA FEKTER ON ROLE OF ECB:
The ECB already has a strong role. It is one of the main instruments to tackle the crisis. There are discussions about how far the ECB should be better enabled in terms of bond purchases.
We have contractual barriers but they are under discussion. Austria has always supported a very stable currency and we must under no circumstance lose sight of the ECB's mandate to fight inflation.
But because for refinancing banks and states we need an instrument that can be flexible, I can imagine a further development. We have the EFSF as a flexible instrument at the moment, we will see how markets will react.
ON INCREASING EFSF BAILOUT FUND'S FIREPOWER:
We decided on the instruments for the leveraging of the EFSF yesterday and we hope that the markets will accept these instruments. It would not be serious to put a number on it because it depends on how the markets evaluate and use this instrument.
ON SITUATION IN ITALY:
Italy made reform programmes and now they have to do the homework. Everybody was surprised how quickly Italy reacted. With the new government stability will return, I think.
ON CLOSER EURO ZONE UNION:
We will have to continue to develop the euro zone with a stability union. I hope that also the non-euro countries in Europe will commit themselves to a stability union. We will have to take measures to tackle the budgets of the countries because there will only be stability if we do our homework.
ON SITUATION IN HUNGARY:
Our neighbour Hungary, which is not doing so well on a fiscal level, has been in touch with the IMF. We think it's good that countries that have financial difficulties outside of the euro zone are being supported.
SWEDISH FINANCE MINISTER ANDERS BORG
ON WAY AHEAD AND ROLE OF THE EUROPEAN CENTRAL BANK:
The first step forward is further measures, particularly from the new Italian government. I think the market will not provide for honeymoons. They need to bring out all the skeletons, so we can see a step forward when it comes to credibility in their debt market.
Thereafter you could start discussions on how to strengthen the firewall and I think in those discussions we need to keep all options on the table.
To my mind price stability is secured in Europe and therefore there is some room to manoeuvre also for the central bank on this issue.
DUTCH FINANCE MINISTER JAN KEES DE JAGER ON ROLE OF EUROPEAN CENTRAL BANK:
...It can never be a substitute for fiscal discipline and economic reform. Lack of economic reform and lack of fiscal discipline has brought us into this crisis, so you also have to address these fundamental issues.
EU ECONOMIC AND MONETARY AFFAIRS COMMISSIONER OLLI REHN ON ECONOMIC GOVERNANCE PROPOSALS:
Yesterday in the Eurogroup I presented the Commission's proposals to further improve economic governance, for instance by tighter monitoring of national budgets and having more competences to take preventive action if a member states is facing a risk of financial instability.
This received a positive welcome and I will present these proposals to the Ecofin Council and I expect that the member states will support further reinforcement of economic governance to create a true stability union, or an ever closer economic union.
ON INCREASING IMF RESOURCES:
We are working towards having an increase of the IMF resources. We see very much eye-to-eye with the IMF's Christine Lagarde on this.
ON FINALISING EU CRISIS RESPONSE:
We are now entering the critical period of 10 days to complete and conclude the crisis response of the European Union. And we have to continue to work especially on two fronts -- both in order to ensure that we have sufficiently credible financial firewalls to contain market turbulence and at the same time we need to further reinforce our economic governance...
(Reporting by Robert-Jan Bartunek, Robin Emmott, Jan Strupczewski, Christopher Le Coq, John O'Donnell, Juliane von Reppert-Bismarck and Ben Deighton)