Euro zone’s Juncker: No new action needed on debt crisis

BRUSSELS (BestGrowthStock) – Euro zone finance ministers took no extra action to quell the debt crisis at a meeting on Monday and said they believed the existing fund set up to help troubled European economies had enough resources for the time being.

Jean-Claude Juncker, the chairman of the Eurogroup of countries using the euro single currency, said the idea of euro zone bonds was not raised at the meeting and that the existing EU debt crisis fund was large enough to weather the threat of contagion.

“We don’t have any new decision to announce to you,” Juncker told reporters after the five-hour meeting, saying ministers had discussed Spain and Portugal and held lengthy talks with the managing director of the International Monetary Fund, Dominique Strauss-Kahn, on the general economic situation in Europe.

“As regards the economic assessment of the IMF, we probably agree on the economic outlook,” said Olli Rehn, the European commissioner for economic and monetary affairs.

“Recovery is taking hold and it is progressing but at the same time it is essential that we contain the financial bushfires so that they will not turn into a Europe-wide forest fire.”

Ahead of the meeting, Strauss-Kahn had urged the ministers to increase the size of a 750 billion euro ($1 trillion) bailout mechanism for debt-stricken states and suggested the European Central Bank step up purchases of government bonds, an IMF report obtained by Reuters showed.

But EU paymaster Germany, Europe’s biggest economy, rejected any such moves and also dismissed a call by two veteran finance ministers for joint euro bonds guaranteed by all governments.

Both Rehn and Juncker played down demands for immediate further steps to tackle the crisis, and the head of the EFSF crisis fund said it had enough money to deal with any more bailouts after Ireland’s 85 billion euro package.

“The EFSF will use for Ireland much less than one tenth of its overall lending capacity and this implies that there are sufficient resources left to deal with other relevant cases, if needed,” EFSF head Klaus Regling told a news conference at the end of the meeting.

(Reporting by Jan Strupczewski, Marcin Grajewski and John O’Donnell, writing by Luke Baker, editing by Rex Merrifield)

Euro zone’s Juncker: No new action needed on debt crisis