This week, some euro-zone members have been calling for the permanent bailout fund to be provided with a banking license that would provide it with unlimited access to money from the European Central Bank. The "bazooka" option might help crisis countries in the short term, but it would entail massive risks in the long run.
The bazooka debate heated up after a suggestion from some countries, including Italy and France, that the permanent euro rescue fund, the European Stability Mechanism (ESM), should be equipped with "unlimited firepower" through a banking license. In concrete terms, it would enable the ESM to borrow unlimited amounts of money from the European Central Bank and use it to shore up euro-zone member states threatening to buckle under the weight of the crisis.
Given that billions of euros have already been deployed in the euro crisis, the idea of unlimited credit seems risky to say the very least. Not surprisingly, the reactions have been intense. "A banking license for the ESM would mean firing up the money printing machine, which means inflation and nearly unlimited liabilities," Patrick Döring, the general secretaty of the business-friendly Free Democratic Party, the junior partner in Chancellor Angela Merkel's government coalition, told SPIEGEL ONLINE. "That is why the FDP cannot and will not allow a banking license to be issued."
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