Germany denies imminent plans for trillion-euro fund

THE Eurozone descended into confusion yesterday, with officials giving contradictory signals on the prospects for a capital increase for the region’s bailout fund.

German finance minister Wolfgang Schäuble denied that the Eurozone is considering plans to boost the firepower of the European Financial Stability Facility (EFSF) by a factor of five so that it could deploy €2-€3 trillion.

Asked if an increase could be pushed through on Thursday when the German parliament votes on the smaller increase to the EFSF agreed in July, he said: “No, that is clear... We do not intend to increase it.”

But markets are still awash with rumours that a plan to create a bailout facility in the trillions is afoot.

Some economists, however, say that it wouldn’t save the region anyway. Capital Economics analysts said: “Overall, the reported proposals are perhaps the minimum required to buy some time in the event of a Greek default. But, just like the many previous bailout packages, they would not be a permanent solution.”