European Central Bank Governing Council member Klaas Knot saidGermany should support raising the European emergency fund to helpend the region's debt crisis.

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“The most important obstacle lies in Germany, not in theNetherlands,” Knot said in an interview on Dutch public televisionlast night. “I think that more money is needed and we will use thetime to convince our German colleagues.”

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German Chancellor Angela Merkel has resisted calls to ratchet upbailout funding amid warnings that the current amount isn't enoughto safeguard nations such as Italy and Spain. Germany has insteadfocused on budget discipline as the best means to stem the crisisnow in its third year.

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“We haven't moved in the right direction and it's also clearthat measures needed are happening too slowly and too limited insize,” said Knot, who in July succeeded Nout Wellink at the Dutchcentral bank. “A significant acceleration in decision-making isneeded.”

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German lawmakers will probably resist increasing funds forEuropean bailouts to ease the debt crisis, two allies of Merkelsaid yesterday, signaling opposition to a bigger firewall. The 500billion-euro ($640 billion) ceiling for the permanent EuropeanStability Mechanism is scheduled to go into effect this year.

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Separately, Knot said he isn't worried about the depreciation ofthe euro against the U.S. dollar. “It's part of the normal exchangerate fluctuation, even in historic perspective the euro isremarkably stable even compared to other currencies.”

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Bloomberg News

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