Germany may ease its staunch objections to any expansion of the European Union’s €750 billion rescue fund as sovereign debt concerns continue to heighten across the eurozone, according to Bloomberg. A spokesman for German chancellor Angela Merkel declined to repeat previous objections to expanding the rescue facility, merely stating that “no decision has been made about widening the rescue fund,” and adding, “Only a small portion of the available funds has been tapped.” The topic could be up for discussion at the February summit of EU leaders.
Meanwhile, the European Central Bank is said to have moved to purchase Portuguese bonds to quell rising concerns over rising debt financing costs that could lead to Portugal seeking international aid. Credit default swaps have reached fresh highs as speculation intensifies, reaching levels that Goldman Sachs economist Erik Nielsen said are “not sustainable,” warning that further increases in debt financing costs would lead to rescue packages for Spain and Portugal. EU officials are asserting that there are “no talks going on, nor envisaged to being” about a bailout for Portugal.
