UPDATE 1-EU, Germany deny report euro rescue fund inadequate

* Commission calls report “absolutely false”
* Paper says proposal to double rescue fund
* Germany says rescue funding adequate

(Adds quotes, background and details)

By Stephen Brown

BERLIN, Nov 25 (BestGrowthStock) – The European Commission and
German government denied on Thursday a news report that Brussels
was considering doubling the size of a rescue fund to support
the euro, with Berlin saying the fund was adequately financed.

An unsourced report in German daily Die Welt said that the
European Union’s executive body had proposed doubling the size
of the European Financial Stability Facility (EFSF).

“This is absolutely false,” said a European Commission
spokesman.

Established after the bailout of Greece in May to defend the
euro from further crises, the EFSF is designed to help a euro
zone country by issuing bonds backed by up to 440 billion euros
($585.9 billion) worth of guarantees from euro zone governments.

“We think the question does not arise because only one
country so far has applied for assistance from the EFSF and it
is not an amount that makes us worry that there would not be
capacity,” said a German finance ministry spokesman.

German Bundesbank chief Axel Weber, a powerful member of the
European Central Bank’s governing council, said in Paris one day
earlier the EFSF and other EU rescue funds had enough money, if
needed, to cover the borrowing needs of stretched euro zone
members Greece, Ireland, Portugal and Spain. [ID:nLDE6AN28M]

Together with separate EU and International Monetary Fund
backing, the funds totalling 750 billion euros “should be more
than enough to see off an attack on the euro zone”, he said.

Currency and credit markets have been unnerved by German
proposals to force bond holders to share the cost of any future
default by highly indebted euro zone countries, as well as by
the alarmist tone of recent comments by Chancellor Angela Merkel
and European Council President Herman Van Rompuy.

Die Welt said unnamed experts were concerned that Spain
could need a financial bailout in future, and that the existing
fund might therefore not be big enough to cover this.

Ireland is so far the only country to apply to the EFSF for
help coping with the impact of a banking crisis on its public
finances. Just before the creation of the EFSF, Greece received
a three-year, 110 billion-euro bailout from the EU and IMF.
(Additional reporting by Andreas Rinke, Dave Graham and Jan
Strupczewski in Brussels; Editing by Maria Golovnina)

UPDATE 1-EU, Germany deny report euro rescue fund inadequate