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Austria's Fekter sees no need to top up ESM bailout fund
December 2, 2012 / 10:19 AM / 5 years ago

Austria's Fekter sees no need to top up ESM bailout fund

VIENNA (Reuters) - Austrian Finance Minister Maria Fekter sees no need to inject more funds into the euro zone’s ESM bailout fund after ratings agency Moody’s stripped it of its top rating last week.

Austrian Finance Minister Maria Fekter prepares her papers during an extraordinary session on corruption of the Parliament in Vienna November 8, 2012. REUTERS/Leonhard Foeger

“The ESM has enough firepower,” she told the Oesterreich newspaper in an interview published on Sunday.

Moody’s cut its rating for the European Stability Mechanism and sister fund EFSF following its downgrade of France in November, noting a high correlation in credit risk among the rescue funds and their largest financial backers.

Fekter, one of the first European officials to comment on the ESM rating downgrade, called the move “regrettable”, adding: “I hope it does not affect interest rate levels. That would be to the disadvantage of countries that need help from the ESM.”

The ESM took effect in October and will have a lending capacity of 500 billion euros ($650 billion) to aid distressed sovereigns in return for strict fiscal and structural reforms.

Fekter gave an upbeat outlook on mastering the euro zone’s sovereign debt crisis, noting Spanish banks had needed less support than first expected while Portugal and Ireland were getting back on their feet.

“The crisis is not yet over (but) including Greece’s rescue we have put the euro zone on solid ground,” she said.

Austria is one of 17 euro zone countries which determine policies regarding the ESM.

Reporting by Michael Shields; Editing by Pravin Char

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