RTRS:Germany seen raising euro bailout contribution
(Reuters) - Germany remains opposed to an increase in the size of the euro zone's new bailout fund but is increasingly likely to agree to boost its own contribution, a senior lawmaker from the ruling coalition signalled on Friday.
The euro zone is under international pressure to raise the combined lending capacity of the permanent bailout fund, the European Stability Mechanism (ESM), and its temporary predecessor, the European Financial Stability Facility (EFSF).
German Chancellor Angela Merkel's centre-right coalition, facing growing public resistance to throwing more money at heavily indebted states like Greece, does not want to raise the ESM ceiling of 500 billion euros (417 billion pounds).
But, in an effort to assuage the global concerns and to calm financial markets, officials say it is willing to raise its own liability temporarily to 290 billion euros from a previously envisaged 211 billion by allowing the two funds to run in parallel.
"The 500 billion euro ceiling (for the ESM) must stay. But given that the ESM capital will be built up only slowly we must ensure there is not less money available in future for rescuing other euro zone states," Michael Meister, a deputy parliamentary floor leader for Merkel's Christian Democrats (CDU), told Reuters.
The ESM comes into operation in July and in its first year will have a maximum credit limit of just 200 billion euros. Under the plan, the 240 billion euros still available under the EFSF will remain available until the ESM is fully funded.
Germany's liability would fall as current EFSF funding programmes for Greece, Portugal and Ireland come to an end.
Germany and its euro zone partners are due to take a decision by the end of March on boosting the firewall.
The size of the euro zone's firewall is of keen interest to the Group of 20 economies which are due to meet again in April.
They want to stop the euro debt crisis dragging on the global economy but are reluctant to boost the bailout resources provided through the International Monetary Fund unless the euro zone does more to increase its own firewall.
