Merkel says increase in rescue funds won't stop market worry
GERMAN Chancellor Angela Merkel yesterday questioned whether an increase in the eurozone's rescue funds would reassure markets.
Europe had already lost a lot of confidence by failing to deliver on its promises, she said in the opening address to the World Economic Forum in Davos.
"Now they say, 'it should be twice as big'," she added. "'If it were twice as big, we'd believe you'. Some say, 'it should even be three times as big, then we'd really believe you'. And I always ask myself how long is that credible and when is that no longer credible."
The German Chancellor has remained steadfastly against any increase in the rescue fund unless individual member states agree to tougher budget rules.
"What we don't want (in Germany) is a situation in which we promise something we can't back up in the end because if Germany... promises something that can't be kept if markets attack it hard, then Europe is really vulnerable."
EU officials say they expect Berlin to agree in March to let the existing European Financial Stability Facility, which still has about €250bn in uncommitted funds, and the future €500bn European Stability Mechanism, to run in parallel. It is hoped this will be enough to calm the markets and create a firewall for the rest of Europe if Greece was to default.
The euro crisis will take centre stage in Davos again today.
Taoiseach Enda Kenny will participate in key seminar aptly entitled 'Rebuilding Europe'.
Mr Kenny will also hold a number of private meetings with key business chiefs, including Sherly Sandberg of Facebook, Micheal Fries of Liberty Global. Tomorrow, he'll join an informal meeting of world economic leaders.