Germany’s plan to speed up payments into Europe’s future permanent bailout fund with cash is aimed at securing the highest ratings for its bonds, said a senior lawmaker from Chancellor Angela Merkel’s party.
Germany may pay 8.6 billion euros ($11.1 billion) into the European Stability Mechanism in 2012, twice the amount slated in the budget, providing it can persuade other euro-region states to double their payments, Norbert Barthle, the Christian Democratic Union’s budget spokesman, said yesterday in an interview.
German coalition lawmakers see no scope to increase the 500 billion euro ESM, while its lending power may be maximized by reducing costs influenced by ratings, said Barthle, speaking by phone. Germany in July agreed to pay a quarter or about 20 billion euros of the fund’s so-called paid-in cash stock over five years.
Speeding up the payments is “definitely conceivable while a German go-it-alone will definitely not work,” said Barthle. “The aim is to secure good ratings for the fund and win a little independence from the rating agencies.”
Euro-region leaders are holding parallel talks on shaping the euro’s temporary and permanent rescue funds after the costs borne by Spain and Italy to sell debt soared this year and prompted calls to bring forward creation of the ESM.
