EU willing to pump up crisis fund if needed: Belgium

16th December 2010, Comments 0 comments

The European Union is willing to put as much money as needed into a permanent debt rescue fund for the eurozone, the EU's Belgian presidency said at a summit on Thursday.

Although no immediate decision will be taken on the amount, there is "a joint will to put in as much money as needed" in the future financial rescue system, Belgian Prime Minister Yves Leterme told RTBF radio.

Germany and other nations had so far resisted pressure, including from the powerful European Central Bank and International Monetary Fund, to boost the size of the European Financial Stability Facility that expires in 2013.

After bailouts for Greece and Ireland, analysts had warned the EFSF might not be substantial enough to rescue a large economy such as Spain.

EU leaders meeting in Brussels have agreed to rewrite the bloc's rule-book to enable the temporary, EFSF trillion-dollar rescue fund to be turned into a permanent umbrella for governments needing financial help.

The Belgian premier also said EU leaders meeting in Brussels would discuss over dinner Thursday a controversial proposal to launch joint eurozone bonds enabling economically-battered nations to borrow money at lower interest rates.

"It's an idea that's gaining momentum, but a decision won't be taken in the coming weeks," he said. But he added that so-called E-bonds are "inevitable" and "will see the light one day."

Germany and France have opposed the eurozone bonds, arguing that they would discourage ailing economies from taking the necessary measures to reassure lenders about their creditworthiness.

© 2010 AFP

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