European finance ministers agreed Monday that their new rescue system forstruggling eurozone economies would be able to lend €500bn ($675bn) for any future bail-outs, but deferred all decisions on how they will ensure the fund can achieve that level of financial firepower.
The size of the fund is identical to the current, temporary rescue system - Brussels stands by wider EFSF scope temporary rescue system – made up of €440bn from a eurozone fund and another €60bn from an European Union-wide facility – that has been plagued by doubts over whether it is big enough to handle the expanding number of countries that may need assistance.
But Jean-Claude Juncker, the Luxembourg prime minister who heads the group of 17 eurozone countries, said that unlike the current system, the new fund would be able to lend all €500bn it will have under its control. The current fund can only lend about €250bn because of complex rules that require it to maintain cash buffers in order to reassure financial markets of its creditworthiness.
For more: FT.com / Brussels / Economy - Deal reached to boost eurozone bail-out fund
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