AP News

Germany reiterates opposition to banking license

BERLIN (AP) — German Chancellor Angela Merkel has underlined her country's resistance to an idea to help lower other European countries' borrowing costs — giving the region's permanent rescue fund a banking license.

Speaking to the press following a meeting with Italian premier Mario Monti Wednesday , Merkel repeated her government's resistance to the idea, which would allow the European Stability Mechanism to borrow from the European Central Bank and enable it buy up more of a country's bonds.

Merkel also praised Rome's reform efforts adding that she sees them as "the significant contribution" to bringing down the high borrowing costs from which Italy is suffering.

Monti says that Italy is making good progress and markets are beginning to honor that.

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