Merkel set to allow firewall to rise

(Financial Times) -- Germany is poised to bow to international pressure and allow a temporary increase in the eurozone's financial "firewall" this week, to prevent the crisis in the region's periphery spreading to other member states.

Officials in Berlin signalled on Sunday that the government would allow funds to be boosted as a way of calming financial market pressures.

Angela Merkel, Germany's chancellor, had resisted any increase, despite pressure from most of her eurozone partners and the US administration, because she risks a political backlash from sceptical allies in her ruling coalition if it means any increase in Germany's overall financial guarantees for its partners. But the thinking in Berlin is that she cannot resist the international pressure indefinitely.

Olli Rehn, EU commissioner for monetary affairs, expected eurozone finance ministers to reach a decision at a meeting in Copenhagen this Friday. Read More