EU insists on bigger bailout funds despite German opposition

Feb 23, 2012, 11:23 GMT

Brussels - The eurozone needs to equip itself with bigger firewalls against contagion, the European Union's executive said Thursday, amid reports that Germany was opposed to boosting the currency bloc's bailout funds.

EU Economy Commissioner Olli Rehn said much progress had already been achieved with a second bailout for Greece, the German-sponsored fiscal compact on budget discipline, and reforms in Spain and Italy. But it was not enough.

'There is a clear need to further strengthen the euro area financial firewalls in order in order to equip Europe to contain contagion and counter speculative pressures,' Rehn said.

The Financial Times on Thursday reported that Germany was against scrapping a 500-billion-euro (665-billion-dollar) cap on euro bailout funds. The International Monetary Fund said this week its own contribution to eurozone rescue efforts was dependent on such a move.