Germany’s opposition to strengthening the European Financial Stability Facility (EFSF), the rescue vehicle of the euro zone, has to end, while the country’s insistence on a euro zone competitiveness pact is “necessary and politically clever.”
According to Reuters, the head of the BDA employers' association, Dieter Hundt, wrote in a German newspaper on Tuesday that while he supported a competitiveness pact as part of a comprehensive reform package, German opposition to increasing the funding for the EFSF should stop. In the newspaper Handelsblatt, Hundt wrote, "The question to be asked is what would be the impact on the markets and those speculators who always try to speculate against the euro."
Currently the nominal amount of the EFSF is 440 billion euros ($613 billion), but its practical limit because of guarantees and other restrictions is only 250 billion euros. The restrictions are necessary if the EFSF is to maintain its AAA rating, which allows it to borrow money on the world market at more reasonable rates.