THE GUARDIAN: Angela Merkel poised to remove opposition to direct lending by rescue fund in move seen as step towards sharing debt burdenAngela Merkel is poised to allow the eurozone's €750bn (£605bn) bailout fund to buy up the bonds of crisis-hit governments in a desperate effort to drive down borrowing costs for Spain and Italy and prevent the single currency from imploding.
Germany has long opposed allowing the eurozone's rescue fund, the European Financial Stability Facility, to lend directly to troubled eurozone countries, fearing that Berlin would end up paying the bill, and the beneficiaries would escape the strict conditions imposed on Greece, Portugal and Ireland.
But Merkel has come under intense pressure as financial markets have pushed up borrowing costs for Spain to levels that many analysts see as unsustainable.
Analysts are likely to see the decision as the first step towards sharing the burden of troubled countries' debts across the single currency's 17 members, though it falls short of the "eurobonds" proposed by the European commission president, José Manuel Barroso.
A spokeswoman for Merkel said: "Nothing has been decided yet." » | Patrick Wintour in Los Cabos | Tuesday, June 19, 2012
THE GUARDIAN: Germany surrenders over eurozone bailout fund: All the financial firepower Europe can muster will be used to drive down Spain's borrowing costs – that, at least, is the talk » | Larry Elliott, economic editor | Tuesday, June 19, 2012
