Germany isn't opposed in theory to leveraging the EFSF, but sees a number of practical problems with the idea and is refusing to be forced to make quick decisions, according to people familiar with the government's position. Germany's parliament is due to vote on Sept. 29 on legislation to increase the rescue fund's lending capacity to €440 billion and give it new powers, including the right to buy bonds in secondary markets and provide funds for governments to recapitalize banks. Mrs. Merkel is trying to prevent a rebellion within her coalition on the issue. Raising the specter of a more-radical revamp of the EFSF would make it even harder to keep her lawmakers in line. Growing hostility of German lawmakers and voters to more-generous bailout aid for euro members means that additional measures will be hard to ratify even after the Sept. 29 vote. The German finance minister, Wolfgang Schäuble, told reporters that the bailout fund can only work within the legal framework of the European Union's treaty, and more specifically, within the agreement governing the bailout fund. Neither of those allows the facility to be leveraged, he said. A number of ECB officials have rejected the leverage idea. But on Sunday, executive board member Lorenzo Bini Smaghi of Italy became the first ECB official to publicly throw his weight behind the idea of leveraging the bailout fund to stem the crisis
Access Investments-Building Awareness - European Union-ROMANIA
Monday, September 26, 2011
Germany isn't opposed in theory to leveraging the EFSF, but sees a number of practical problems with the idea and is refusing to be forced to make quick decisions, according to people familiar with the government's position. Germany's parliament is due to vote on Sept. 29 on legislation to increase the rescue fund's lending capacity to €440 billion and give it new powers, including the right to buy bonds in secondary markets and provide funds for governments to recapitalize banks. Mrs. Merkel is trying to prevent a rebellion within her coalition on the issue. Raising the specter of a more-radical revamp of the EFSF would make it even harder to keep her lawmakers in line. Growing hostility of German lawmakers and voters to more-generous bailout aid for euro members means that additional measures will be hard to ratify even after the Sept. 29 vote. The German finance minister, Wolfgang Schäuble, told reporters that the bailout fund can only work within the legal framework of the European Union's treaty, and more specifically, within the agreement governing the bailout fund. Neither of those allows the facility to be leveraged, he said. A number of ECB officials have rejected the leverage idea. But on Sunday, executive board member Lorenzo Bini Smaghi of Italy became the first ECB official to publicly throw his weight behind the idea of leveraging the bailout fund to stem the crisis
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The interplay of ideas and cooperation between Hjalmar Sehacht in Germany and, through Owen Young, the J.P. Morgan interests in New York, is only one facet of a vast and ambitious system of cooperation and international alliance for world control. As described by Carroll Quigley, this system is "... nothing less than to create a world system of financial control, in private hands, able to dominate the political system of each country and the economy of the world as a whole".
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