Germany Under Pressure to Pony Up

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http://www.spiegel.de/international/europe/0,1518,810331,00.html

At first glance, one could be forgiven for thinking that the euro crisis had gone away. The financial markets are relatively calm, and the panic that many feared would follow the downgrade of nine euro-zone countries by the rating agency Standard & Poor's has failed to materialize. International investors are buying up Italian, Spanish and French government bonds as if nothing had happened.

But the calm is deceptive, because the next pitfall is lying in wait for the would-be rescuers of the euro. Greece, the perennial trouble spot, could well cause turbulence again before the end of this month. And the closer the July launch of the permanent euro rescue fund, the European Stability Mechanism (ESM), gets, the more rancorous the dispute over capital contributions will become.

Chancellor Angela Merkel had actually wanted her European partners to put all their energies into the construction of the new 26-nation fiscal pact, which was agreed upon at the EU summit in December, so that it will be ready to sign in March. In the aftermath of the recent EU decision to provide €150 billion ($195 billion) in additional resources to the IMF to help it tackle the euro crisis, and the decision to bring forward the start of the ESM to July, the German government is opposed to providing any kind of further financial assistance to combat the crisis.

But a debate has once again broken out over whether Germany is doing enough to solve the crisis. Pressure on Merkel has increased from a number of sides in recent weeks.