Germany sees no need to increase the European Financial Stability Facility from the current 440 billion euros ($635 billion), Deputy Finance Minister Joerg Asmussen said in an interview with CNBC television.
The package, combined with the International Monetary Fund’s contribution, is sufficient to limit debt contagion in the euro area, CNBC cited Asmussen as saying.
The EFSF “as a tool has enough to limit contagion and this is a real step forward,” Asmussen said. “When we come to the size, we are building up an effective lending capacity of 440 billion euros. On top of this you have IMF money available. So I think the size of the EFSF is enough.”
Asmussen also sees no immediate need to recapitalize Europe’s banks as capital ratios increase, according to the report. “One needs to be prepared and this is why we have the new tool at the EFSF if something happens in the future,” he is cited as saying.
The Deputy Finance Minister expressed confidence that European leaders will find a solution for Finland, which is seeking collateral for a second Greek bailout, CNBC said.
“This is a very thin line,” Asmussen said. “We have some time to go because the secondary program will not reach us, let’s say, before October but I’m confident that we will find a solution.”
He repeated Germany’s rejection of joint euro bonds, according to the report.