DUESSELDORF, Germany (Reuters) - German Finance Minister Wolfgang Schaeuble warned on Monday against unrealistic expectations that this weekend’s European Union summit can come up with a “definitive solution” to the euro zone’s sovereign debt crisis.
“We won’t have a definitive solution this weekend,” the German minister told reporters in Duesseldorf.
Expectations of the October 23 summit have steadily built up since Chancellor Angela Merkel and France’s Nicolas Sarkozy promised in bilateral talks on October 9 to unveil a comprehensive new euro zone crisis package, including an agreement on how to recapitalize Europe’s banks.
But Schaeuble’s comments that the summit would not draw a line under the crisis once and for all -- remarks echoed by an aide to Merkel -- put paid to a euro rally against the U.S. dollar and brought German Bund futures back from early losses.
“The chancellor has pointed out that the dreams building up that this package will mean everything will be solved and over by Monday cannot be fulfilled,” said Merkel’s spokesman Steffen Seibert.
“They are important working steps on a long path that will reach far into next year and on which more steps will have to follow,” Seibert told a news conference.
With markets and the media pushing for details, Seibert reiterated that Germany and France had agreed their talks would be kept confidential “ahead of the weekend, which is near and when answers to some of these questions will be given.”
“The discussions will be carried out internally and then made public on the weekend, not the other way round,” he said.
Seibert added that Merkel did not plan to meet top bankers before the summit.
Schaeuble said it was crucial that major banks have a minimum capital adequacy requirement and added that he assumed there would be agreement in Europe that this should be “9 percent for core Tier-One systemically relevant banks.”
The minister added that problems on the interbank market showed that banks do not trust each other, though he did not elaborate.
Schaeuble will address the German parliament’s budget committee on the summit this Thursday, but a ministry spokesman would not give further details of what might come out of the weekend meeting regarding ways of beefing up the European Financial Stability Facility (EFSF) bailout fund.
“The question of how the EFSF instruments can be used more effectively or as effectively as possible is the subject of intense discussions but I cannot comment on individual models,” said the finance ministry spokesman.
Additional reporting by Andreas Rinke and Annika Breidthardt in Berlin; Writing by Stephen Brown; Editing by Noah Barkin and Catherine Evans