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Bundesbank Proposes Reform of European Crisis Response Mechanism

  • ESM suggested as the region’s leading fiscal authority
  • Central bank calls for new bond terms to ease restructuring

Germany’s Bundesbank proposed reforms to streamline Europe’s response to future fiscal crises.

The central bank suggests turning the European Stability Mechanism into the region’s leading fiscal authority with competences encompassing those currently carried out by the European Commission and the European Central Bank. It also wants a change in the terms of new government-debt issues to allow easier restructuring and a maturity extension should the country enter an aid program.