EU pumps up rescue fund

"There's the man with the money." This is how German Finance Minister Wolfgang Schäuble was described by the moderator of a conference with students in Copenhagen this week, as European Union foreign ministers meet in the Danish capital preparing to increase the "firewall" against the kinds of debt problems that have left the eurozone disheveled.

Schäuble, ostensibly amused, appeared to disagree with the assessment, but not really. Not only the Danish students present were aware of Germany's - and by extension, Schäuble's - position in the eurozone. As Europe's strongest economy, his counterparts in Europe are aware that Germany is in control when it comes to the stipulation - and payment - of rescue packages. As a result, it comes as no surprise that the finance ministers meeting in Copenhagen on Friday followed Schäuble's lead when it came to augmenting the eurozone rescue mechanism: the "firewall," as it's come to be called, does in the end have the task of preventing the debt crisis from spreading

Fancy bill: 800 billion euros

By combining the old, 440-billion-euro European Financial Stability Facility (EFSF) safety net with the new, permanent European Stability Mechanism (ESM), the EU has already increased its "firewall" to 700 billion euros. This is only valid until 2013, when the ESM fully takes over. There will only be 500 billion euros of new money, in accordance with the line Germany has proposed for months now.

Wolfgang Schäuble surprised many of his colleagues on the eve of the Copenhagen summit by announcing that an extra 100 billion euros of money would be paid out on top of loans already given to Greece. The sum of the "firewall" had effectively been raised to 800 billion euros, according to EU diplomats.

And Austria's finance minister, Maria Fekter, placed a crown on top of that sum by saying: "Eight-hundred-billion euros is more than $1 trillion … We've achieved the sum that was asked of us."

Irish Finance Minister Michael Noonan added: "In the end financial markets do their calculations in US dollars."

The magical word "trillion" emerged earlier on this week when the Organization for Economic Cooperation and Development (OECD) demanded that the eurozone firewall be heightened "significantly."

That sum, however, much to the chagrin of Noonan and Fekter, was meant in euros, not dollars.

Establishing trust

For Finance Minister Wolfgang Schäuble, however, the discussion concerning the numbers misses the topic. "The man with the money" is more interested in talking about the duties of crisis states as they work to balance their budgets and reform their economies.

In Schäuble's it's more about establishing long-term trust in Europe, not about temporary solutions. He admits that - when it comes to this exact point - there's not always harmony in Europe. "We come together so that we can discuss how to move forward. There are, of course, differing opinions. You can even call these disputes. But we always achieve mutual solutions."

Author: Bernd Riegert / glb
Editor: Jessie Wingard