Yet a spokesman acknowledged that discussions were underway in Brussels on giving the European Stability Mechanism (ESM) certain instruments to lure private investors and thus boost the fund.
German weekly Der Spiegel BY CITY A.M. REPORTER reported at the weekend that governments could boost the firepower of the ESM to €2 trillion by opening new leverage options such as offering bond investors partial protection in the event of a default.
But finance ministry spokesman Martin Kotthaus said the report’s figures were “illusory”.
“When I read these figures, specific volumes, then we need to say clearly that this is not feasible in any form,” Kotthaus said. “The number is neither understandable, feasible, nor recognisable.”
He added: “Member states are discussing the possibility of the use of the two financial instruments, which currently are attached to the EFSF [the bailout fund that is being superseded], and to attach them to the ESM.”
Eurozone officials could also set up one or more co-investment funds to attract public and private funding to boost the ESM’s seed money.