Berlin rejects rate cut to Portugal’s bailout fund

The German government has rejected the possibility of reducing the interest rates on the bailout money advanced to Portugal and Ireland, unlike the reduction in interest on the second aid package to Greece, approved this week in Brussels.

"I think there will be no such discussion," said Steffen Seibert, spokesman from the German government this Wednesday in response to a question on a possible reduction of interest rates for Portugal and Ireland.

Eurogroup countries decided to lower the interest rates of loans to Greece, from 3.5% to about two percent, after a reduction of interest payable by Athens on the first tranche granted in April 2010.

"I am not aware of any discussions of this kind for Portugal and Ireland," Seibert said, noting that the implementation of the adjustment programs negotiated by Lisbon and Dublin with the Troika "has resulted in a positive assessment"

Seibert also said that Angela Merkel considers €500 billion a sufficient amount for the future European Stability Mechanism (MEE), which will be permanent, and replace, as from July, the current European Financial Stability Fund (EFSF ), which served in particular to give a bailout package of €78 billion to Portugal.

"I do not consider it necessary to increase the funding mechanism in the future," said Seibert.

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