LUXEMBOURG: Euro zone finance ministers arrive to inaugurate ESM, discuss Spain, Greece and other crisis-related issues

Record ID: 702380

  • Title: LUXEMBOURG: Euro zone finance ministers arrive to inaugurate ESM, discuss Spain, Greece and other crisis-related issues
  • Date: 9th October 2012
  • Summary: LUXEMBOURG, LUXEMBOURG (OCTOBER 8, 2012) (REUTERS) AUSTRIAN FINANCE MINISTER MARIA FEKTER ARRIVING
  • Embargoed: 24th October 2012 13:00
  • Keywords:
  • Location: Luxembourg
  • Country: Luxembourg
  • Topics: International Relations,Economic News,Politics
  • Reuters ID: LVAAH9CTP79OK09QZMPLZ45I00JY
  • Story Text: Euro zone finance ministers arrived in Luxembourg on Monday (October 8) to inaugurate the zone's new permanent bailout fund and to discuss the situation in crisis-stricken Spain and Greece.
    Spain, in deep trouble since a burst property bubble caused a banking crisis, has been under pressure to become the fourth country to request a bailout programme, after Greece, Ireland and Portugal.
    But upon arriving for the meeting Germany's Finance Minister Wolfgang Schaeuble reiterated that Spain does not need an aid programme, because it is already getting help for its banking sector.
    "I always listen closely to what the Spanish government says and I confirm that the Spanish government said it doesn't need an aid programme. The Spanish government is doing everything necessary financially by restructuring. Spain has a problem with banks because of the real estate bubble of the past years. Spain is being helped to recapitalize its banks. And Spain as other countries suffers from contagion arising from the insecurity in the euro zone as a whole," Schaeuble said as he arrived for the meeting.
    Ministers will also discuss the situation in Greece, but are not planning to take any decision on whether the debt-ridden country has made enough progress in cutting its deficit to receive the next tranche of aid of its international lenders. Greece is still negotiating its progress with representatives of the EU, the ECB and the IMF, known as the Troika.
    "Greece is doing a lot of efforts. It's very difficult down there. And I think if we need to give them additional time, if that does not require a lot of additional money, we should support Greece," said Luxembourg Finance Minister Luc Frieden.
    Ministers are also inaugurating the Eurogroup's permanent bailout fund today, two years after EU leaders endorsed the idea of setting it up.
    The fund, called the European Stability Mechanism (ESM), will be used to lend to distressed euro zone sovereigns in return for strict fiscal and structural reforms that aim to put economies that have lost investor trust back on track.
    It is part of the single currency area's drive for an overhaul of its economic structures and deeper integration, a discussion the ministers will take forward today with talks on an idea to create a single euro zone budget.
    While the fund is reason for some festivity, Austrian Fekter warned the economic problems in the euro zone were far from over.
    "We have come a long way towards stability, but we are not out yet over our problems. We must stabilise the banks in Spain, see that Greece fulfils its conditions. There will likely be an application from Cyprus. Slovenia has difficulties. We must see that in Europe the debts don't get over our heads," Austrian Finance Minister Maria Fekter said.
    "Nobody is having any party mood, but I am less pessimistic about the future prospects of the euro zone than for instance in the spring," EU Commissioner Olli Rehn added.
  • Copyright Holder: REUTERS
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