Senior German lawmakers from Chancellor Angela Merkel's coalition on Friday attacked the European Commission's call to re-assess the eurozone's bailout fund and ruled out boosting its size. "We need the debate prompted by (European Commission President Jose Manual) Barroso like a hole in the head," Norbert Barthle, chief budget expert for Merkel's conservatives told Reuters.
Barroso called on Thursday for a re-assessment of all elements of the current and future bailout funds, the EFSF and ESM, including their size, to convince markets the eurozone can respond to the debt crisis. "Just two weeks ago the eurozone state and government leaders agreed an extension of the instruments of the EFSF and ESM", Barthle said. "Even the implementation of the decisions... will require great parliamentary efforts after the summer break."
"Furthermore the ... (region's) leaders have clearly ruled out boosting the volume of the EFSF," he added. "Barroso's behaviour is counterproductive." At last month's summit, eurozone leaders agreed new powers for the EFSF, including giving states precautionary credit lines and lending them money to recapitalise banks, but rejected a proposal to boost its size from 440 billion euros.
Criticism of Barroso's letter and the possibility of boosting the EFSF was widespread among lawmakers belonging to parties of Germany's ruling coalition. Rainer Bruederle, the parliamentary leader of Merkel's junior coalition partners the Free Democrats, said the letter was "ill-considered and irresponsible".
"What we need to stabilise the euro is an effective and assertive second growth and stability pact, and not a frivolous letter from Brussels," Bruederle was cited as saying on the website of mass-selling German daily Bild. "It is ill-considered and irresponsible to question something that state and government leaders have agreed on just recently," he added. Barroso had said a rethink was needed because markets were unconvinced that the eurozone could handle the crisis, which was now threatening core states.
The deputy floor leader of Merkel's Christian Democrats, Michael Meister, told German daily Die Welt the key task was for Italy and Spain to demonstrate they were carrying out necessary reforms. Financial market pressure on Italy and Spain ratcheted up this week, sucking the countries deeper into the euro area danger zone and prompting emergency consultations on Friday between European capitals.