Europe

Tuesday, July 10, 2012 - 05:31

Schaeuble To Court: ESM Delay Would Have Serious Consequences


KARLSRUHE (MNI) - German Finance Minister Wolfgang Schaeuble on Tuesday warned that a long delay before Europe's ESM rescue fund can take effect would have serious consequences for market confidence and the Eurozone's fragile economies.

Schaeuble, speaking at a German Constitutional Court hearing over injunctions against the ESM, said the ESM was a more "lasting, dependable instrument" than the temporary EFSF fund and had put Europe on the path toward regaining confidence.

"A considerable delay ... would have serious consequences far beyond Germany," Schaeuble said. Such a delay would entail "dangers for financial stability" and cause a "clear strengthening" of the Eurozone crisis, which could once again lead some European countries to have serious refinancing problems.

Schaeuble argued "the ESM and Fiscal Compact have put us on a good path to win back trust" in the Eurozone.

A delay could have "serious economic consequences" for the Eurozone as well as Germany, and in turn would risk placing the euro project "in question," Schaeuble warned.

Germany's Constitutional Court is holding a hearing Tuesday into whether to grant temporary injunctions sought against the ESM and Fiscal Compact until the court can issue a more permanent ruling on its constitutionality.

-- Frankfurt bureau: +49 69 720 142; email: ccermak@marketnews.com

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