Germany Says “No” to Banking Union

The German government on Wednesday reaffirmed its opposition to allowing European Stability Mechanism, Europe’s permanent bailout fund, to directly lend to troubled banks in the Eurozone.

Government spokesman Steffen Seibert said at a regular press conference here that the German rejection of the idea of any direct recapitalisation of banks by the ESM “is well known.”

Markets reacted positively to the Commission’s report, but have backtracked since the German announcement. DJIA futures are down -107 points and Germany’s DAX is down nearly -70 points.

Paul Ausick