Germany continues to hold back any Greek plan

BERLIN (AP) — German officials on Monday downplayed prospects of any quick and dramatic change of course in the eurozone debt crisis, days before a parliamentary vote on beefing up the continent’s rescue fund.

Weekend meetings of global financial leaders in Washington raised hopes of a change in strategy, with officials indicating that would focus on further boosting the firepower of the euro440 billion ($595 billion) rescue fund — perhaps by allowing it to tap loans from the European Central Bank or otherwise leveraging its lending capacity.

Hopes for such a move boosted European stock markets on Monday, with German and French bank shares rising strongly.

However, ahead of a parliamentary vote Thursday on changes to the fund that eurozone leaders already agreed to in July, Berlin was keen to underline its attachment to its often-criticized step-by-step approach.

Thursday’s vote on expanding the powers of the rescue fund, the so-called European Financial Stability Facility, will be followed over the coming months by final decisions on a second bailout package for Greece and on a permanent rescue mechanism meant to replace the EFSF from 2013, Finance Ministry spokesman Martin Kotthaus noted.

“That is quite simply the procedure that lies in front of us — we will work through it step by step,” Kotthaus said.

When asked in Washington whether he supported the idea of leveraging the rescue fund, German Finance Minister Wolfgang Schaeuble said: “Of course we will use the EFSF in the most efficient way possible.”

The discussion about the new rescue fund powers is taking place amid speculation that Greece ultimately will be unable to pay its debts and will have to force heavy losses on bondholders. That would be beyond a 21 percent sacrifice agreed to under a second, euro109 billion bailout deal for Greece. Greek and other officials deny that will happen.

In an interview with n-tv television Monday, Schaueble was asked whether there is a plan to move up the effective July 2013 date of the long-term rescue mechanism, or ESM.

Schaeuble pointed out that the process of establishing the ESM, which would allow a country to go bankrupt and default on its debts, takes time.

“That doesn’t go very fast,” Schaeuble said. “If we could do it faster … it would be good, but probably we will need the time that we have calculated.”