US: We won’t bail out the EU

Stephen Dinneen
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US senate has passed a motion making it far more difficult to use funds to help bail out foreign governments.

The move is a reaction to the international efforts to plough money into debt-ridden Greece. The measure means any funds loaned by the US to foreign governments will have to be repaid in full. The bill was unanimously passed, with Republicans and Democrats all rallying around the proposal yesterday.

The measure comes as Germany said banks should contribute to the emergency rescue package being drawn up to help struggling nations. Chancellor Angela Merkel is awaiting approval for Germany’s contribution of up to €148bn to the €750bn aid package for embattled Eurozone countries.

If it is passed by the German lower house on Friday conservative coalition spokesman Volker Kauder says European banks should partially fund the package through a financial transaction tax.

The move is an attempt to quell the fierce criticism of the hugely unpopular bailout package in Germany. Merkel’s insistence on ploughing money into the fund was blamed for her loss of a key seat in the local elections, costing her party its majority.