BERLIN:Germanyis prepared to allow the 200 billion euros in funds already committed by the bloc's temporary bailout fund to run in parallel with the 500 billion euros in its permanent successor, Chancellor Angela Merkel said on Monday.
The European Stability Mechanism (ESM), with an eventual total lending capacity of 500 billion euros, is due to start operating this summer. The European Financial Stability Facility (EFSF) has currently earmarked 200 billion forGreece,PortugalandIreland.
"We can imagine that these 200 billion euros could run parallel to the 500 billion euros of the ESM until they have been paid back by the countries. That will take several years, and then the ESM will stand alone with the 500 billion," Merkel told a conference of her ruling Christian Democrats.
Commenting on the state of the financial markets, Merkel said the situation had calmed somewhat in recent weeks but added that Portuguese and Spanish bonds remained fragile.
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