Eurozone summit cancelled amid German bailout fund opposition

PanARMENIAN.Net - A eurozone summit, which was intended to follow this week's EU summit, will no longer take place due to Germany's opposition to the only item on the agenda - boosting the size of the single currency's bailout funds, M&C reported citing DPA.

Several European Union diplomats had said last week that eurozone leaders would meet on Friday lunchtime, following a two-day EU summit in Brussels, to discuss scrapping a 500-billion-euro (672-billion-dollar) cap on euro area rescue funds.

But given that Germany - the EU's paymaster - has clearly said it was not yet ready to countenance such a move, the idea of holding the meeting has been abandoned, another EU diplomat said on Tuesday, Fenruary 28.

On Monday, European Commission President Jose Manuel Barroso said eurozone countries would discuss the issue later in March, after the final eurozone approval of a second bailout for Greece, expected next week.

Over the weekend, Group of 20 (G20) economies such as China, Brazil and the United States signaled that they would not contribute to an increase in the International Monetary Fund (IMF)'s bailout facilities until the eurozone acted to boost its own.

IMF chief Christine Lagarde also said the fund's contribution to the new Greek bailout would also depend on the eurozone boosting the size of its financial safety net mechanisms.

Increasing so-called firewalls for the eurozone is thought to be a key to reassuring markets that larger economies such as Italy and Spain would be shielded from any debt crisis contagion.