Thursday 19 April 2018

Debt Crisis: EU economic chief Rehn warns 10 days to save the eurozone

EU economic commissioner Ollie Rehn. Photo: Getty Images
EU economic commissioner Ollie Rehn. Photo: Getty Images reporters

ECONOMIC and Monetary Affairs Commissioner Olli Rehn has warned there are just 10 days to save the eurozone.

Following on from a meeting in Brussels yesterday where finance ministers agreed to increase the firepower of the European Financial Stability Fund (EFSF) and look for the backing of the International Monetary Fund, Mr Rehn said: “"We are now entering the critical period of 10 days to complete and conclude the crisis response of the European Union."

The 17-nation group announced plans to insure the first 20pc to 30pc of new bond issues for countries with funding difficulties like Italy and Spain.

Next week eurozone leaders meet at a European Council meeting where further measures are expected to be announced.

But France’s central bank governor said at a conference in Singapore that the EFSF is already struggling.

"It must also be remembered that the EFSF is already funding at very wide (borrowing) levels over Germany, struggled in its last auction to raise the required funds and would have its rating put under severe pressure by any rating downgrade of France," Rabobank strategists said in a note.

"This must call into question any plans related to the EFSF. It is yesterday's solution and the market has simply moved on."

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