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Sunday, March 25, 2012

Report: Germany to allow increase to "Firewall"

by Calculated Risk on 3/25/2012 07:16:00 PM

From the Financial Times: Merkel set to allow firewall to rise

Senior European officials ... would allow the €440bn [EFSF] ... to keep running when a new permanent €500bn fund, called the European Stability Mechanism, starts up in the middle of this year.

[With] about €200bn committed to Greek, Irish and Portuguese bailouts, the total available would be €740bn. ... the system to fall back to €500bn once the EFSF expires in mid-2013.
excerpt with permission
This is probably still not enough to bailout Spain or Italy.

And from Bloomberg:
German Chancellor Angela Merkel and her finance minister, Wolfgang Schaeuble, have abandoned their opposition to combining the two funds, Der Spiegel reported yesterday, citing unnamed government officials. The two leaders have agreed that the EFSF and ESM may be “in operation” for a transitional period, the magazine reported.

The focus by policy makers and investors has shifted over recent weeks from Greece to Spain, where Prime Minister Mariano Rajoy is struggling to reduce the country’s budget deficit in the face of a looming recession.

Rajoy faces his first general strike on March 29 as unions protest against changes to employment laws making it cheaper to fire workers and cut wages. Three months after coming to power, he is due to present the 2012 budget on March 30, which is designed to cut the deficit.
Summary for Week ending March 23rd
Schedule for Week of March 25th