German opposition: have banks finance rescue fund

AP News
Posted: Dec 12, 2012 8:35 AM
German opposition: have banks finance rescue fund

BERLIN (AP) — Germany's main opposition parties are proposing that banks should pay at least €200 billion ($260 billion) into a new European rescue fund rather than hoping for taxpayer-funded bailouts in future.

Chancellor Angela Merkel's center-left challenger in elections expected next September, Peer Steinbrueck, says it's important to reduce "the blackmail potential of banks."

In a joint appearance Wednesday with his Social Democrats' allies, the Greens, Steinbrueck also backed calls for a so-called European debt redemption fund, aimed at helping struggling countries pay off debt. Merkel's government has vehemently rejected that idea and all other proposals for pooling eurozone debt, saying it doesn't want a "transfer union."

Steinbrueck says Europe has long been a transfer union and Merkel has accelerated that process during the crisis by agreeing to bailouts for some countries.