Franco-German rift delays euro zone bailout plan

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Franco-German rift delays euro zone bailout plan

Franco-German rift delays euro zone bailout plan
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France and Germany are struggling to agree on how to solve the European debt crisis as euro zone finance ministers meet in Brussels.

Berlin and Paris differ on how to reduce Greek debt and how to boost the bloc’s bailout fund, known as the European Financial Stability Facility.

Luxembourg Prime Minister Jean-Claude Juncker, who also chairs the Eurogroup, said failure to strike a deal quickly would be disastrous.

“We are not exactly presenting a shining example of exquisite governance here,” Juncker said.

German Chancellor Angela Merkel and French President Nicolas Sarkozy will meet Saturday, ahead of euro zone summits on Sunday and Wednesday.

German Finance Minister Wolfgang Schäuble rubbished claims of any tension between the countries, saying additional talks are needed because Merkel is legally required to consult MPs.

“We need another summit next week because German law prescribes that the use of the instruments of the expanded stability mechanism has to be approved by the German parliament’s budgetary committee beforehand,” he told reporters.

The so-called troika of the European Commission, the IMF and the European Central Bank says Athens should get an eight billion euro aid installament as part of an international bailout agreed last year.

But all seventeen euro zone countries must agree before that tranche is paid out.

Greece says it will go bankrupt without that help.