Monday 23 April 2018

Debt Crisis: Sarkozy says Eurozone rescue talks stalled

Nicolas Sarkozy. Photo: Getty Images
Nicolas Sarkozy. Photo: Getty Images reporters

ATTEMPTS to agree a rescue plan for the eurozone’s debt crisis are stalled over how to increase the scope of the €440bn bailout fund, French President Nicolas Sarkozy said.

He is reported to have told to have told a meeting that there are issues as to whether the European Central bank should support the zone's European Financial Stability Facility.

He will fly to Frankfurt today to seek a breakthrough with German Chancellor Angela Merkel and he is also expected to meet outgoing ECB president Jean-Claude Trichet.

France and Germany have promised to come up with a plan in time for a summit of EU leaders on Sunday.

Sarkozy earlier told legislators that Paris and Berlin were divided over what the relationship should be between the ECB and the EFSF.

France wants the fund to have a banking licence which would allow it to leverage its capital at the ECB both the bank and Germany are opposed to such a move .

"In Germany, the coalition is divided on this issue.

"It is not just Angela Merkel who we need to convince," Sarkozy said, according to reports by news agency Reuters.

Earlier, European Commission President Jose Manuel Barroso said he would insist on decisive action from EU leaders at Sunday's summit on tackling the debt crisis.

He said the summit must deliver "a vigorous response to give guarantees to all countries, notably Spain".

Meanwhile, a German finance ministry spokesman has said the euro zone rescue fundwill not be raised beyond the €440bn already approved, nor will Germany's participation rise beyond €211bn.

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