Bundesbank Sees No ‘Urgent Need’ for Final Decision on European IMF Loans
The Bundesbank said it sees no urgent need for a decision on a loan to the International Monetary Fund, suggesting the Dec. 19 deadline set by European Union leaders may be missed.
“We don’t see an urgent need for a final decision,” a spokesman for the Frankfurt-based Bundesbank said by telephone. “We want to evaluate the whole situation.”
EU leaders decided at a Dec. 9 summit to channel an additional 200 billion euros ($261 billion) in loans to the IMF so that it has the resources to help fight the euro region’s debt crisis. Central banks from the 17 euro nations would provide 150 billion euros and 50 billion euros would come from EU members outside the currency bloc. Bundesbank President Jens Weidmann has said the German central bank is ready to contribute as much as 45 billion euros if certain conditions are met.
The Bundesbank wants large countries outside the euro region and the EU to take part in the loan to avoid accusations that euro-area central banks are merely funding governments via the IMF, something that would be contrary to the euro’s founding treaty. It’s important that there is a “fair distribution of the burden amongst the IMF members,” Weidmann said earlier this week. The U.S. has said it won’t participate.
The Bundesbank has not yet received a response from German Finance Minister Wolfgang Schaeuble to a Dec. 9 letter that set out its conditions for the loan, the spokesman said.
Luxembourg’s Jean-Claude Juncker, who leads the group of euro-area finance ministers, today expressed confidence that the deadline for agreement on the loan would be met. Juncker also said he hadn’t spoken with Weidmann about it.
The euro rose on Juncker’s comments, only to give up those gains when the Bundesbank said it won’t rush to a decision. The currency traded at $1.3032 at 4:10 p.m. in Frankfurt.
To contact the reporters on this story: Jeff Black in Frankfurt at jblack25@bloomberg.net; Stephanie Bodoni in Luxembourg at sbodoni@bloomberg.net
To contact the editor responsible for this story: Matthew Brockett at mbrockett1@bloomberg.net
Bundesbank Sees No ‘Urgent Need’ for Decision on IMF Loan
Ralph Orlowski/Bloomberg
A German flag flies in front of the Bundesbank headquarters in Frankfurt.
A German flag flies in front of the Bundesbank headquarters in Frankfurt. Photographer: Ralph Orlowski/Bloomberg
Dec. 16 (Bloomberg) -- Christian Schulz, a senior economist at Joh. Berenberg Gossler & Co., talks about the outlook for the role of the European Central Bank in the euro zone sovereign-debt crisis. Schulz speaks with Scarlet Fu on Bloomberg Television's "InBusiness With Margaret Brennan." (Source: Bloomberg)
Bundesbank President Jens Weidmann
Michele Tantussi/Bloomberg
Bundesbank President Jens Weidmann has said the German central bank is ready to contribute as much as 45 billion euros if certain conditions are met.
Bundesbank President Jens Weidmann has said the German central bank is ready to contribute as much as 45 billion euros if certain conditions are met. Photographer: Michele Tantussi/Bloomberg
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