France wants to turn the EFSF into a bank, which – healthily capitalized as it is – could then turn to the European Central Bank (ECB) for credit that countries like Greece or Portugal won’t get anywhere else.
Germany is strictly opposed to such a move. Finance Minister Wolfgang Schäuble called it “a license for printing money,” posing the risk of inflation and violating the statutes of the ECB, which is dedicated to impartiality and price stability.
“The eurozone should have such a monetary tool,” says Xavier Timbeau, director of analysis at the Center for Economic Research OFCE in Paris. “The Fed in the United States, the Bank of England, the Bank of Japan – they all intervene by buying up government bonds. Why should we deprive ourselves of such a possibility?”