Regling sees no more countries using EU safety net

The head of the European Union's safety net for countries struggling with public finances said on Saturday he did not think any more members would have to tap the eurozone rescue fund, for now. "At the moment it does not appear so," Klaus Regling told Austrian radio when asked if countries other than Ireland would need help from the 440 billion euro ($614.6 billion) European Financial Stability Facility (EFSF) he leads.
"For Spain I don't see a necessity for this at all anymore. Portugal certainly has more to do. Should it come to this, we have enough money at the moment to cover these two countries but it doesn't seem necessary at the moment." However, he said countries on Europe's periphery still had work to do to get their finances in order and warned that the debt crisis that shook Europe was not over yet.
Regling dismissed speculation Greece may have to restructure its debt and mark down its value by around 30 percent. "At the moment you clearly have to note the markets have a different view of the situation than do the officials who are responsible for this," he said. "But we learned in the financial crisis - sometimes very painfully learned - that markets are not always right...I assume the markets are again misjudging the situation, which is one reason why interest rate spreads are so high."
He said he had not proposed that the ESFS be allowed to buy back sovereign debt as a way to relieve pressure on Greece. "There is a clear belief among the IMF, ECB and the European Commission that 'Plan A' - the measures that are now implemented in Greece - will lead to an acceptable debt situation and that no further measures are necessary," he said.
European officials plan to turn the EFSF from a temporary fund into a permanent structure as part of efforts to deal with the debt crisis and head off future crises. Talks are due to come to a head this month. "It's about a comprehensive package Of course, this includes government budgets but it also refers to the competitiveness of the individual countries," he said.
"The euro safety net which we have on a temporary basis now will become a permanent safety mechanism. Now we have to nail down the key parameters for this permanent crisis mechanism." Regling, a German economist and former top European Commission official, was not asked in the interview about market speculation he could be a successor to European Central Bank President Jean-Claude Trichet, who steps down this year.