EU to extend ‘big bazooka’ EFSF bail-out fund at Copenhagen meeting…(Won’t Work…)
Eurozone finance ministers are expected to extend part of the “big bazooka” bail-out fund in Copenhagen on Friday, but defy international demands to radically boost the size of its firewalls.
By Louise Armitstead
29 Mar 2012
A draft agreement prepared for the finance ministers’ meetings reveals a plan to retain the €240bn (£200bn) rump of the European Financial Stability Fund (EFSF) until next year.
The move boosts the available bail-out funds to €740bn from this summer but falls far short of the €1 trillion firewall that international leaders have been calling for.
It marks a concession from Germany but is unlikely to stem fears over the advancing debt crisis, particularly in Spain.
On Thursday night Germany’s finance minister, Wolfgang Schaeuble, said the fund would be further boosted to €800bn, with help from the International Monetary Fund (IMF). He dismissed fears of countries leaving the eurozone as “nonsense”, and said that Spain must implement labour reforms or Europe would “never succeed” in solving the debt crisis.
But on Thursday Spain was paralysed as hundreds of thousands of workers protested against the government’s austerity budget, due to be unveiled on Friday.