BERLIN (Reuters) - Germany’s finance ministry said on Monday that talk of the euro zone’s permanent bailout fund being leveraged to 2 trillion euros via private sector involvement was not realistic, adding that any discussion of precise figures was “purely abstract”.
Ministry spokesman Martin Kotthaus said there were talks going on in Brussels about leveraging the capacity of the European Stability Mechanism (ESM) in the same way as its predecessor, the European Financial Stability Fund (EFSF).
But, asked about a report in Spiegel magazine that the ESM’s capacity could be leveraged to 2 trillion euros, he said this was “illusory”.
“It is not feasible to talk about figures at present,” he told reporters. “It is purely abstract.”
Kotthaus said Germany’s government and parliament backed the idea of boosting ESM capacity via “private capital participation in loans or other instruments for states which require them” just as they had supported such instruments for the EFSF.
The ESM is expected to come into force on October 8 with a firepower of 500 billion euros.
Kotthaus said he had no information about a separate Spiegel report on a 20 billion euro hole in Greece’s state budget.
Reporting by Gernot Heller and Stephen Brown, writing by Gareth Jones