German Chancellor Angela Merkel has forced another weakening in the European Union’s bailout fund, this time cutting the cash that countries will pay into the fund, according to Bloomberg.Merkel found the €40 billion first called for too big, so she forced the rest of Europe’s leader to cut it to €16 billion.
The agreement to enlarge the bailout fund that will take over for the current temporary support package was just agreed to 3 days ago.
It’s uncertain how this will impact the size of the broader package.
Chancellor Merkel is facing a difficult political situation in Germany, where she stands accused of shutting down nuclear power plants as a political ploy and is on the brink of losing elections in a key southern stronghold.
Forcing a cut in the fund’s upfront capital may be seen as another piece of a political gamesmanship.