No impact on ESM talks from Strauss-Kahn: Schaeuble

BERLIN Sun May 15, 2011 12:32pm EDT

BERLIN (Reuters) - The arrest of IMF chief Dominique Strauss-Kahn will not affect talks on the planned permanent bailout fund for the euro zone, German Finance Minister Wolfgang Schaeuble said on Sunday.

In an interview with German TV channel ARD before a euro zone finance ministers meeting in Brussels on Monday, Schaeuble said another International Monetary Fund official would take Strauss-Kahn's place at those talks.

"The IMF is a large institution and able to work. A replacement will take part tomorrow at the euro group meeting," Schaeuble said.

Euro zone finance ministers are set to discuss the European Stability Mechanism (ESM) draft, presented by the euro group after rounds of negotiations amongst the 17 euro zone governments. A decision is expected in June.

Schaeuble said if Greece is unable to return to capital markets next year, then further measures must be discussed.

Earlier this week, he said any fresh aid to Greece would have to be tied to clear conditions.

Schaeuble also said he believed a majority of the German parliament was in favor of the ESM, echoing comments on Saturday by the parliamentary floor leader of the junior partner in Chancellor Angela Merkel's coalition.

(Reporting by Holger Hansen; Writing by Sam Cage)

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