Eurozone ministers agree to expand rescue fundNovember 30th, 2011 - 2:05 pm ICT by IANS
Brussels, Nov 30 (IANS) Eurozone finance ministers agreed Tuesday to expand a rescue fund and to turn to the International Monetary Fund (IMF) for help to contain the spreading debt crisis.
The finance ministers’ meeting raised two possible approaches to beef up the European Financial Stability Facility (EFSF): by allowing EFSF fund to guarantee 20 percent to 30 percent of potential losses incurred by investors who buy bonds of governments in financial trouble, and by creating a common investment fund to attract foreign investors to buy eurozone government bonds.
Klaus Regling, head of the EFSF, said he could not put a single figure on the scaled up EFSF, which EU leaders had hoped would reach one trillion euros.
Market participants have fears that the fund would not reach that amount, reported Xinhua.
The EFSF alone might not be able to solve all the problems. Finance ministers have agreed to turn to the IMF for help, mainly through bilateral loans to “adequately match the new firepower of the EFSF” and “cooperate more closely”, Eurogroup chairman Jean-Claude Juncker told a news conference.
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Tags: bilateral loans, brussels, debt crisis, efsf, finance ministers, financial stability, financial trouble, firepower, foreign investors, government bonds, international monetary fund, international monetary fund imf, investment fund, jean claude juncker, klaus regling, market participants, ministers meeting, news conference, trillion, xinhua