Eurozone needs 'mother of all firewalls', says OECD Heralding a major battle with Germany, Jean-Claude Juncker, the chairman of eurozone finance ministers, argued that opponents of an increase risked leaving the euro exposed to future contagion from financial markets. "The firewalls have to be increased," he said. For me it is obvious that we would underestimate the current crisis and remaining consequences of that crisis if we would not be prepared to increase the firewall. Berlin is fiercely resisting plans to combine the euro's existing bailout "facility," worth €440bn, with a €500bn European Stability Mechanism (ESM), due to begin operating in July to create a combined fund of €940bn. On Monday, German Chancellor Angela Merkel, who faces stiff parliamentary opposition to an increase, refused to combine the two funds, only conceding that €200bn in existing loans to Greece, Portugal and Ireland would be able to run in tandem with the ESM. In contrast to Germany's position, the OECD's annual 2012 report on the eurozone warns that refinancing needs, both for highly indebted countries and fragile banks, could be more than €1 trillion within the next two years. "Although it is unclear that funds on this scale would ever need to be drawn down, the availability of credible firewalls may enhance confidence," the report concluded. Euro area stability funds should be expanded further, subject to conditionality, to provide credible support. The OECD, which sees 0.2pc growth in the bloc in 2012, rather than contraction, has cautioned the eurozone against complacency following the calmer financial markets in the wake of a massive European Central Bank liquidity operation carried out at the start of the year. The pressure has come down, but we can't draw too much comfort from signs of healing. How many times have we seen conditions ease only for the crisis to return? Risk spreads on government debt remain at unsustainable levels for several European countries, and they have shown recent signs of creeping up again," said Mr Gurria.