(WSJ) Europe Split Threatens Rescue Plan

After a weekend of tense meetings among world finance officials here, euro-zone leaders were weighing options to maximize the size of their bailout fund by borrowing against it. The move could provide trillions of dollars of firepower to rescue governments and banks””-but only if all 17 euro-zone legislatures approve a two-month-old agreement to broaden the bailout fund.

Highly public opposition from Germany, the largest and most powerful euro-zone economy, could block the plan.

Policy makers are “focused on their own internal restraints, so that we don’t have the outcome that we need,” Antonio Borges, head of the International Monetary Fund’s Europe department, said Sunday. While key players were understandably acting in self-interest, he said, it was generating “disastrous” collective results.

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Posted in * Economics, Politics, * International News & Commentary, --European Sovereign Debt Crisis of 2010, Credit Markets, Currency Markets, Economy, Euro, Europe, European Central Bank, Federal Reserve, Foreign Relations, G20, Germany, Politics in General, The Banking System/Sector, The Credit Freeze Crisis of Fall 2008/The Recession of 2007--, The U.S. Government, Treasury Secretary Timothy Geithner