German Finance Minister Wolfgang Schaeuble said he’s confident his country’s parliament will support a second aid package for Greece in a Feb. 27 vote, leaving open whether the euro region’s financial backstops should be increased.
“I assume that we will get the necessary support in parliament on Monday,” Schaeuble told reporters during a meeting in Mexico City of finance officials from the 20 biggest economies. A decision on the need to boost the size of the region’s permanent rescue fund, known as the European Stability Mechanism, will be taken “in the course of March,” he said.
That’ll be “in time” for the International Monetary Fund to decide about an increase of its lending capacity at its meeting in Washington on April 20-22, Schaeuble said. The minister said he assumes that the IMF will provide the “necessary support” for the second bailout for Greece.
Group of 20 officials gathered less than a week after Europe agreed to a second bailout for Greece in a bid to avert the euro-area’s first sovereign default. European Union governments are due to review whether to raise the ESM’s ceiling “in the course of March,” European Monetary Affairs Commissioner Olli Rehn told reporters in Mexico City yesterday, suggesting no final decision will be made at a leaders’ summit starting March 1.
Germany’s priority on the ESM is deciding how quickly countries should pay into the fund “if we want it actually to enter into force this summer,” Steffen Seibert, Chancellor Angela Merkel’s spokesman, told reporters in Berlin on Feb. 22.
Schaeuble said there has been “a broad tendency, but no decision,” to pay capital into the ESM in two tranches instead of an originally envisaged five installments.
Bundesbank President Jens Weidmann said Germany is making an “important contribution” to solving the debt crisis. Financial aid can only buy time that needs to be used to improve competitiveness and restore confidence, Weidmann said at a press briefing alongside Schaeuble.