Contradictory statements made by eurozone politicians to domestic audiences have underlined the fragility of last week’s deal to rescue Greece and unsettled financial markets already on edge due to the US debt impasse. (Watch video below)
But common eurozone bonds remain anathema in Berlin, where fiscal conservatives are warning against the euro zone becoming a “transfer union” in which hard-working German taxpayers’ money would be poured into a bottomless pit.
German Finance Minister Wolfgang Schäuble sought to assuage critics in the ruling coalition, assuring lawmakers that the summit did not give the eurozone rescue fund “carte blanche” to buy bonds of states in difficulty.
“Even in the future, such purchases should only take place under very strict conditions when the European Central Bank deems there are exceptional circumstances on the financial markets and dangers for financial stability,” Schäuble said in a letter dated 26 July, obtained by Reuters on Wednesday. “The government rejects a ‘carte blanche’ for widespread purchases on the secondary market.”