Big burden
November 29, 2011
Ahead of Tuesday's meeting of eurozone finance ministers, German Finance Minister Wolfgang Schäuble had a short message for those calling on Germany to rescue Europe from its debt crisis.
"Even Germany is too small to shoulder the entire burden for the whole of Europe or for the whole [euro] currency area," Schäuble told the foreign press association in Berlin late Monday.
No European country, he said, would retain its triple-A rating if the European Central Bank were to become the lender of last resort or if eurobonds were to be introduced.
Appeals to drop resistance
Concerned about the impact of the euro crisis on the global economy, leaders the world over have been appealing for Germany either to contribute more heavily to the eurozone rescue fund or to drop its resistance to jointly guaranteed bonds, or eurobonds, to restore confidence in sovereign debt borrowing.
Many are also calling on Germany to backtrack on its stance against what they see as the most powerful solution to overcoming the eurozone debt crisis - allowing the ECB to intervene more forcefully on the bond markets to lower member states' borrowing costs.
President Barack Obama pressed European Union officials at a meeting in Washington on Monday to act quickly and decisively to resolve their sovereign debt crisis, which, the White House said, is now weighing on the US economy.
Tuesday's meeting of the Eurogroup, consisting of finance ministers of the 17-member eurozone, aims to agree on the details of leveraging the European Financial Stability Fund (EFSF) to help countries such as Italy or Spain, should they need it.
The group is also likely to approve the next tranche of emergency loans for Greece and Ireland.
Signs of concrete action could ease strain on the eurozone markets.
Plenty of credit rating warnings
Underlying the threat to tottering European economies, credit rating agency Moody's warned Tuesday it could downgrade the subordinated debt of 87 banks across 15 countries on concerns that governments would be too cash-strapped to bail them out.
On Monday, French media reported that rival credit rating agency Standard & Poor's could downgrade the outlook on France's top-level triple-A credit status within the next 10 days.
Author: John Blau (AFP, reuters)
Editor: Matt Hermann