Europe limited to the minimum reinforcing its anti-crisis firewall

The euro zone agreed on Friday to strengthen its anti-crisis firewall, but well below the expectations of the international community to ensure an eventual rescue an economy the size of Spain, which has become the main concern of the monetary union.

In a scuffle Friday in Copenhagen, the ministers of the 17 euro zone countries agreed to give the European Stability Mechanism (MEDE), the permanent bailout fund which will take effect in July, “a maximum output of 800,000 million euros “, as claimed Germany.

But of these, 300,000 million for the loans already granted to Greece, Ireland and Portugal, said the statement of the Eurogroup. Therefore, this rescue fund available of 500,000 million euros of fresh funds, the minimum was raised in the negotiations.

This ammunition may be insufficient for the markets, the IMF and the OECD, which advised a device than a billion euros to protect Eurozone contagion from the debt crisis in countries like Spain or Italy.

The European Commission and countries such as France had a more ambitious goal: intended to give an image of extreme strength to the markets by raising the MEDE to 940,000 million euros. This had also proposed to add the funds still unused EFSF, estimated at 240,000 million as reserves in case of extreme necessity.

For months the International Monetary Fund (IMF) and G20 emerging countries, including Brazil, increased the pressure on Europe which required a strengthening of the fire ammunition in exchange for aid to the continent. Especially in a time when Spain has become the number one concern of the euro area.

And this Friday, in Copenhagen, the Spanish economy minister, Luis de Guindos, must explain to their counterparts how do you plan to achieve the deficit target of 5.3% this year and 3% for 2013, as promised with Brussels. “We (at this meeting in Copenhagen) an explanation of the Spanish budget,” said De Guindos.

This budget based on the “austerity” which the Spanish Government presented this Friday in Madrid, “will convince” European partners, he said. Several European leaders expressed throughout this week their doubts and concerns about the health of the Spanish economy and finance. “Spain is in a very difficult situation,” said Commissioner of Economic and Monetary Affairs, Olli Rehn, arriving at the meeting in the Danish capital.

In the midst of difficult negotiations, the appointments of key positions in the European Union, which aims Spain, were postponed. The Eurogroup will decide “in mid-April,” who will occupy the chair of the Executive Committee of the European Central Bank (ECB) to vacate the Spanish Jose Manuel Gonzalez-Paramo said a diplomat.

Everything indicates that the candidate Yves Mersch of Luxembourg shall be imposed on the Spanish Antonio Sainz de Vicuna, current director of the legal department of the ECB. In this case, Spain is eligible for the presidency of the rescue fund or the presidency of the Eurogroup, although this, according to European sources, seems destined to the German Minister, Wolfgang Schäuble.