Belgium MPs to convene early to approve eurozone rescue

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Belgium's parliament will be called back to work some six weeks early to approve new eurozone rescue measures vital to the future of the single currency, Prime Minister Yves Leterme said Sunday.

Speaking on RTB1 television, Leterme said he had asked parliament to convene early September instead of mid-October. "The credibility of the eurozone is at stake so this work must be done as soon as possible," he said.

At a July 21 summit, called amid signs Europe's sovereign debt crisis was spreading to the eurozone's third and fourth largest economies, Italy and Spain, leaders agreed measures to ringfence the euro, notably by beefing up a fund used to bail out smaller economies, Greece, Ireland and Portugal.

The agreement to expand the scope of the the 440-billion-euro ($625 billion) European Financial Stability Facility would enable it to relieve debt-stricken nations by buying their sovereign bonds at lower prices on secondary markets and providing bailouts for their banks.

However, the changes require national parliamentary approval and EU officials have been working hard with their member state counterparts to finalise the legislation needed to implement them.

If national parliaments ratify the changes as swiftly as hoped, the euro's new financial firepower should be in place in September along with legislation on the 750-billion-euro European Stability Mechanism (ESM) that will replace the EFSF in 2013.

But parliaments in some northern nations, where taxpayers are loathe to pay bills for the likes of Greece, may balk at moves to ramp up the rescue pot in size or scope.

EU economic affairs commissioner Olli Rehn, in remarks to appear in Monday's Financial Times Deutschland, said meanwhile that he was optimistic that the summit accords would be in effect by September.

"The technical preparations (to implement the measures) will be completed by the beginning of September at the latest. Parliamentary approval will then follow in September," Rehn told the daily.

"Developments on the markets show that we cannot let the matter drag on," he warned.

© 2011 AFP

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