BERLIN (Reuters) - Germany’s Finance Minister Wolfgang Schaeuble said the country may pay its full contribution to the euro zone’s permanent rescue fund in 2012, a regional German paper wrote.
“It is clear that the sooner and the more paid-in capital the ESM (European Stability Mechanism) has, the more it gains trust on the financial markets,” he was quoted as saying by the Rheinische Post Duesseldorf, in an interview to appear in Monday’s print edition. “My priority is to create trust.”
The Finance Ministry was unavailable to comment.
European leaders agreed in Brussels last week to accelerate the launch of the ESM by a year to mid-2012, as part of measures aimed at putting an end to a devastating debt crisis.
The ESM, which will replace the temporary EFSF bailout fund, will have an effective lending capacity of 500 billion euros ($651.9 billion) and total subscribed capital of 700 billion euros, of which 80 billion euros will be paid-in capital from euro zone countries.
EU leaders agreed earlier this year that the paid-in capital will be channeled into the fund over five years in five equal installments.
Germany’s total contribution to the paid-in capital is set for 21.5 billion euros, paid in instalments of 4.3 billion euros. Earlier this year, it was reticent to pay up its contribution at a faster pace, due to concerns about sticking to its debt brake and consolidating its own budget.
Schaeuble was cited earlier this week by a newspaper as saying Germany would fund its contribution to the ESM with a supplementary budget.
A government source told Reuters earlier this week that Germany’s first instalment could be much higher than previously planned “because people want the ESM to be able to act soon.”
The statement of rating agency Fitch on Friday that a comprehensive solution to the euro zone crisis was beyond the region’s reach has heightened pressure on leaders to get to grips with the turmoil.
The chairman of euro zone finance ministers, Jean-Claude Juncker, said on Wednesday he would like all paid-in capital for the ESM to be contributed during its first year of operation, to ensure it had the firepower to deter speculation.
Schaeuble was also cited as saying the new fiscal compact for all European Union member states except Britain - which last week vetoed it - should be implemented by March 2012, and the new treaty for a stability union should be linked to the ESM treaty.
“It would make sense for the new pact to be linked with the new ESM treaty,” he said. “That would mean that solidarity is inseparable from solidity.”
“Markets want to see actions,” he said.
The ‘fiscal compact’ is meant to allow closer scrutiny of countries’ spending to stop a similar debt crisis recurring and potentially making it more palatable for the European Central Bank to step up its purchases of distressed euro zone debt to hold down borrowing costs.
Reporting By Sarah Marsh and Axel Hildebrandt