Germany may not be ready to back an increase in Europe's bailout fund at a summit next week, delaying efforts to meet international demands for Europe to strengthen its defenses against the region's sovereign debt crisis, according to Reuters. Many finance leaders of G20 countries, meeting in Mexico City this weekend, have demanded that Europe strengthen its firewall as a condition for providing more resources to the International Monetary Fund. The two actions would provide greater assurance to markets that the euro zone debt crisis will not spread. The G20 joined forces in 2008 to fight back against financial crisis which blew up in the United States and caused the worst recession since the 1930s. In the last two years, the chaos has spread to Europe where highly indebted countries have been locked out of debt markets and forced to seek bailouts. Euro zone officials said they do not expect a decision at a European leaders summit on March 1-2 on combining the resources of two European rescue funds. Olli Rehn, European Commissioner for Economic and Monetary Affairs, said he expected an agreement on stronger European firewalls will come next month. "The negotiations are now going on, I am confident that in the course of March, we will be able to take a decision on the reinforcement of the combined lending capacity of the ESM and the EFSF," Rehn told reporters, referring to the two euro zone bailout funds. Germany, which has stated strong opposition to increasing the bailouts, appears to be playing for time. It faces a critical vote on Monday to win support in the German parliament for Greece's second rescue package. Many Bundestag members are skeptical that Greece can meet tough fiscal conditions required to bring its public debt down to 120 percent of GDP by 2020. Similar votes are scheduled in the Netherlands and Finland next week. Germany also wants to see whether enough investors sign up for the Greek debt swap, which Athens wants to complete by March 12, a euro zone official said. "Most euro zone countries are ready to move now, but I am afraid that Germany will need more time to agree to the increase, mainly to be able to better manage the Bundestag," the official said.
