European governments must urgently decide on common measures to protect the stability of the euro zone, EU Economic and Monetary Affairs Commissioner Olli Rehn told a German newspaper Monday.
We must agree on common measures as soon as possible - the sooner the better, he told Die Welt. The calming on markets in the last few weeks has given us a bit of breathing space, but there is no reason to lean back now, we must now act with the necessary determination.
Berlin is insistent that it will not rush any decision on measures to fight the euro zone debt crisis but will instead wait until a comprehensive package of measures is ready for discussion at a summit of European Union leaders in March.
However Rehn said it was important to prevent the debt crisis from undermining the economic recovery and positive developments on the labor market.
It is necessary that European governments ensure it is not the financial markets deciding and endangering the economic recovery, he said.
Rehn said the euro rescue fund's effective lending capacity must be increased and its functions diversified to clear any doubts that the EU was able to act against speculation on the markets.
Die Welt also cited sources close to the negotiations as saying EU governments were intensively discussing plans to allow the euro rescue fund to extend precautionary credit lines to at-risk countries. If possible, the credit line would not have to be used, but rather displayed simply to scare away speculators, the paper wrote.
The European Financial Stability Facility (EFSF) has a headline value of 440 billion euros ($598.8 billion) but an effective lending capacity estimated at only 225 billion euros because of the need to secure a triple-A credit rating.
(Reporting by Sarah Marsh, editing by Mark Trevelyan)