The German government has begun opening the door to shared debts
for the first time in a profound change of policy, agreeing to
explore proposals for a €2.3 trillion ($2.9 trillion)
stabilization fund in order to stop the euro zone's crisis
escalating out of control, U.K. daily The Telegraph reported
Thursday.
Officials in Berlin say privately that Chancellor Angela Merkel
is willing to drop her vehement opposition to plans for a "European
Redemption Pact," a "sinking fund" that would pay down excess
sovereign debt in the euro zone, The Telegraph said.
"It is conceivable so long as there is proper supervision of tax
revenues," said a source in the chancellor's office. The official
warned that there would be no "master plan" or major breakthrough
at the EU summit later this month, The Telegraph said.
Mrs. Merkel rejected the Redemption Pact last November as
"totally impossible," even though it was drafted by Germany's
Council of Economic Experts--or "Five Wise Men"--and is widely
viewed as the only viable route out of the current impasse, The
Telegraph said.
Dow Jones Newswires; dennis.baker@dowjones.com