Bailout fund will not solve crisis: banker

FRANKFURT - Agence France-Presse

European Central Bank policymaker Jens Weidmann speaks in London. REUTERS photo

The current eurozone debt crisis cannot be solved simply by boosting the firepower of bailout funds, both the head of Germany’s Bundesbank and a spokesman for the German government has said.

“We must not just contain the crisis, we must resolve it,” Jens Weidmann -- who as the head of the German central bank also sits on the European Central Bank’s governing council -- said in a speech in London.

In Berlin, government spokesman Stefan Seibert said it was “regrettable” that “no number seems to be high enough in the current debate” over the firepower of the EU’s bailout funds.

“As soon as one number is named, an even higher one is immediately brought into circulation,” Seibert said.

“This only unnerves the markets even more when we have to reach decisions that will calm the market,” the spokesman added.

Europe is facing intense pressure from countries such as the United States -- as well as organisations such as the International Monetary Fund and the Organisation for Economic Cooperation and Development -- to boost the so-called “firewall” of money surrounding the single currency area’s most fragile economies.

Eurozone finance ministers are to meet in Copenhagen starting from today to decide whether to increase the size of their debt rescue mechanisms amid resurgent concerns about the financial health of Spain.

Bundesbank chief Weidmann said the “first step must be to contain the crisis, to prevent it from spreading.”