The euro zone bailout hits a new roadblock — Germany
TEXT OF STORY
STEVE CHIOTAKIS: Finance ministers from the euro zone group of countries are meeting in Brussels today. Number one on the agenda? Taking an even bigger whack at the debt crisis in Europe. As in making the bailout fund bigger for other countries that may be in debt trouble.
Christopher Werth has more from London.
CHRISTOPHER WERTH: Last year, the euro zone crisis was all about bailing out Greece and Ireland. Now, the focus is on Portugal, and Spain could be next. At that point, analyst Andrew Lilico of Europe Economics says the crisis becomes a whole other ball game.
ANDREW LILICO: Spain as an economy would be larger, much larger, than Greece, Ireland and Portugal put together.
Spain is Europe’s fourth largest economy, which is why some European leaders want to expand the size of the roughly $600 billion bailout fund, or make it possible to use that money to buy up government bonds of countries facing rising borrowing costs. But Jonathan Loynes of Capital Economics says there is one major roadblock standing in the way of that plan — Germany.
JONATHAN LOYNES: So far it’s dragged its heals with regards to almost every policy response that we’ve seen in the crisis.
And it’s doing the same now, mostly because German taxpayers say they’re tired of footing the bill. As Europe’s largest and strongest economy, it pays the bulk of what goes into the bailout fund. So it’s likely that no action will be taken in Brussels until the next euro zone country reaches the brink of defaulting on its debt.
In London, I’m Christopher Werth for Marketplace.
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