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Friday, 24 February 2012

Germany resists expansion of rescue fund

"The IMF wants to provide less than the one-third of the total it provided in previous bail-outs", and, "the IMF and European Commission are concerned that the current size of the European Stability Mechanism [rescue fund] won't be enough to quiet markets", according to Der Spiegel.  The G20 continues to pressure Germany into providing more financial support.

The European Stability Mechanism (ESM) rescue fund will be equipped to provide up to 500 billion euro in emergency loans.  The IMF and European Commission argue that is insufficient to "quiet markets".  Germany is reluctant to pledge more funds.

Greece's second bail-out remains under negotiation, and subject to conditions.  According Der Spiegel's report, the IMF seeks to make the IMF's contribution to the second Greek bail-out conditional upon an expansion of the ESM to 750 billion euros by rolling the ESFS rescue fund's 250 billion into the ESM.

I acknowledge Der Spiegel for "Germany isolated over resistance to expanding euro bailout" and "EU has not yet faced the whole sad truth about Greece".

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