BERLIN: A higher lending capacity for the euro zone's rescue fund would help to reassure markets, which are not convinced the bloc's sovereign debt crisis is over and fear more ratings downgrades, the head of the bailout fund was quoted as saying on Sunday.
"More money would reassure markets. Wrongly or rightly the fact is that big numbers in the shop window create calm," Klaus Regling, head of the temporary European Finance and Stability Facility (EFSF), told Germany's Focus magazine in an interview published on Sunday.
Euro zone finance ministers meet inCopenhagenon March 30-31 and are due to decide whether to increase the lending capacity of the bailout fund above a current 500 billion euros.
Germany's Spiegel reported that German Chancellor Angela Merkel, who had been a strong opponent of raising the lending capacity, had now backed down after pressure from European partners and the International Monetary Fund.
Italian Prime Minister Mario Monti said in an interview on Sunday: "the higher the firewalls, the less likely it is that they have to be actually used."
Regling went on to challenge popular opposition inGermanyto more money for the rescue fund.
"The bailouts haven't cost German taxpayers a penny. The belief that this money is gone and will never come back is wrong. These are loans that must be paid back."
Germanyhad profited from the euro zone crisis, he noted, as its borrowing costs had fallen.
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