Plan to boost eurozone rescue fund commits no figures
A plan for boosting the firepower of the eurozone's bailout fund, examined by German MPs late Monday, outlines two options but contains no figures, according to a copy obtained by AFP.
"Several models exist to leverage the capacity" of the European Financial Stability Facility (EFSF), the text said.
But "a more precise number on the extent of leverage can only be determined after contacts with potential investors," according to the the text, distributed to the German parliament's budgetary committee.
Parliament is to vote Wednesday on the broad outlines of a deal which Chancellor Angela Merkel will then negotiate at a European Union summit later in the day.
The figure of a trillion euros ($1.38 trillion) has been cropping up in the public debate over the required firepower of the EFSF.
Set up last year to help struggling eurozone countries, the fund currently has 440 billion euros which is now believed insufficient to face contagion of the crisis now threatening Italy.
The text given to German deputies was drawn up by EFSF officials and will form the basis of talks between European leaders at a second summit in Brussels on Wednesday to chart a path out of the crisis.
Under the first of the two options, the fund would insure a part of the debt of struggling countries and help them secure refinancing on the markets.
The second option would see an appeal to external investors, private and public, to widen the means at the EFSF's disposal.
"The EFSF would benefit from the flexibility to deploy both options, which are not mutually exclusive," the text said.
Technical preparations for the two options could be completed quickly in theory, the text said, though adding the second option needed several weeks to find investors and creditors.
The two options could also be carried out "within the framework of EFSF rules", it said meaning that no new parliamentary approval would be needed except for countries which especially want it, such as Germany.
© 2011 AFP