North and south Europe at odds, says finance minister

Tuesday 10 July 2012

There could be arguments ahead between northern and southern European countries, finance minister Jan Kees de Jager said ahead of Monday night's meeting on the eurozone crisis.

Finance ministers from the 16 eurozone countries were discussing how to recapitalise Spain's banks without adding to the country's debt problem. This would involve loaning the money directly to the banks rather than via the country.

The meeting agreed €30bn to Spain's banks in immediate loans as part of a package that could reach €100bn. It also agreed to relax Spain's deficit targets.

However, differences persist between southern and northern European countries such as the Netherlands, Finland and Germany, who are concerned at the prospect of European bank bailouts using taxpayers' money.

De Jager is insisting that a European banking supervisor must be appointed before the European bailout fund can be authorised to directly recapitalise struggling banks.

He agreed this could take a year but did not say if the banks' government would be liable for any losses in the interim.

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