Fekter opposed to top up of Euro safety net funding
Press Release, 23 January 2012
Austrian Finance Minister Dr. Maria Fekter has expressed opposition to the funding top up for the EFSF and ESM Euro safety nets planned for July. “In terms of demanding additional subsidies from the member states, I would tend to say no, because that would just cause big problems at the level of the national parliaments. There are several member states which are just no longer in a position to contribute more funding to the ESM”, Fekter emphasised.
“ In the case of the EFSF, at any rate, I see no way for us to use more tax money to top it up any further. That probably would be a non-starter at the level of the national parliaments anyway. But we have to look at how it would be possible to provide funding. If the EFSF is able to place its bond issues well, then the funds we have will be enough ” , the Austrian Finance Minister stated just before the meeting of EU finance ministers on 23 January 2012 in Brussels.
In respect of the private participation of Greek banks, Fekter said: “It is crucial that private sector participation remain voluntary, because if it isn’t voluntary, then any reorganisation that occurred would be seen as an insolvency situation. Such a case might be perceived as ‘Lehman II’, and that is precisely what we wish to avoid”, Fekter said. Fekter went on to say: “The Euro group will listen to what the Greek Finance Minister has to say, and in particular what he has to say about the specific models to be offered to the banks.” She said that Greece will also need time, so that the Greeks can secure low interest rates and “dig out from under their mountain of debt”. A second aid package for Greece is currently in discussion: “My assumption is that it will be possible to pay out the next tranche to Athens when we manage to fashion a solution in terms of bank participation that signals sustainability”, Austrian Finance Minister Dr. Fekter stated.
Regarding the fiscal pact, Dr. Fekter noted: “Austria supports the German position, which is to link the fiscal pact closely to the ESM. Strict rules are also important, because we see no reason to let budget offenders destabilise the entire Eurozone. The controls on member states will have to be made stricter. We had Maastrict criteria once upon a time, but no sanctions were imposed for flouting them. I would very much welcome the notion that we need to have preventive oversight at an early stage that will enable us to see when something is going awry. Fiscal discipline will be crucial, so that it will not be necessary to intervene. What that means is that states will be able to retain their autonomy by simply remaining disciplined about playing by the rules”, Dr. Fekter stated in closing.