Weekend Economists Get a Little Drunk January 27-29, 2012

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49. Firewall divides euro zone as Rehn's talk of unity falls on sceptical ears

http://www.irishtimes.com/newspaper/finance/2012/0128/1224310867479.html

THE EURO ZONE siege of Davos continued yesterday, with German and French leaders disagreeing with each other – and EU officials – over whether a bigger firewall is needed to stabilise the single currency.

Amid a third day of divergent views over bailouts, budgetary rules and eurobonds at the World Economic Forum, EU commissioner Olli Rehn told disbelieving delegates there was “quite a strong unity” of views ahead of Monday’s summit in Brussels.

Mr Rehn also delivered an upbeat assessment of debt restructuring talks in Athens, saying a deal with Greek creditor banks was likely in the coming days.

French finance minister François Baroin said he agreed with his German colleague Wolfgang Schäuble on the need to agree rules for firm budgetary discipline, but disagreed with Berlin’s refusal to boost the capacity of the EU bailout “firewall”.