“BRUSSELS (AP) — The 17 countries that use the euro need to build a €1 trillion ($1.3 trillion) firewall to help the struggling currency union return to growth, the head of the Organization for Economic Cooperation and Development said Tuesday.
Angel Gurria, the secretary-general of the Paris-based international development body, said existing plans for a €500 billion ($664 billion) European rescue fund were not enough to restore market confidence in the eurozone.
“The mother of all firewalls should be in place,” Gurria he told a told a news conference in Brussels, where he was flanked by Olli Rehn, the EU’s economic affairs commissioner, who has also been pushing for a larger bailout fund.
A permanent bailout fund of at least €1 trillion would give governments the breathing space to focus on kickstarting growth and restoring the competitiveness of their economies, Gurria added.
As well as shoring up the financial defenses, the OECD chief pointed to a raft of economic reforms that individual countries should enact. According to the organization’s annual report for the eurozone, which was released Tuesday, vulnerable states may need more than €1 trillion in aid over the coming two years and Gurria said eurozone finance ministers should take a decision to boost their bailout funds at their meeting in Copenhagen on Friday.
Germany, the bloc’s largest economy, signaled on Monday that it would support an increase to around €700 billion ($929 billion), but only until some €200 billion in loans already promised to Greece, Ireland and Portugal have been paid back….”
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