Eurozone firewall enhanced to 800 bn euros | Albuquerque Express

Eurozone firewall enhanced to 800 bn euros

Albuquerque Express Friday 30th March, 2012

• It involves bringing together the resources of ESM and EFSF

• Move set to boost market confidence

• From July, the ESM will be the main instrument to finance new programmes

COPENHAGEN - The 17-member eurozone has decided to enhance its capacity to help nations in economic crisis by raising its bailout fund to euro 800 million ($1 trillion), in a move set to boost market confidence.

At their meeting here Friday, the finance ministers of the eurozone said the ceiling for rescuing debt-laden countries in the eurozone will be raised from 500 billion euros (417 billion pounds) to 800 billion euros (667 billion pounds).

"All together, the euro area is mobilising an overall firewall of approximately 800 billion euros, more than one trillion dollars," the ministers, known as the Eurogroup, said in a statement.

It involves bringing together the resources of the new European Stability Mechanism (ESM) and the expiring European Financial Stability Facility (EFSF) to establish a massive backstop.

Announcing the deal, Austrian Finance Minister Maria Fekter said 500 billion euros are to come from the eurozone's new bailout fund, the ESM, to be launched on July 1.

In addition, 200 billion euros were in committed loans to Greece, Ireland and Portugal, carried over from the ESM's predecessor the EFSF.

Friday's agreement takes forward a pact reached at the Euro Summit on 9 December 2011 and reiterated on 2 March 2012.

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