Euro rescue fund to be operational by end of month: report

14th July 2010, Comments 0 comments

The eurozone's 440-billion-euro fund for emergency loans to debt-laden states will be operational by the end of the month and expects to receive a top credit rating, its new head said Wednesday.

"We will be ready to act whenever the politicians tell us to act," Klaus Regling, chief executive of the 560-billion-dollar fund, told the Financial Times.

He said measures had been taken to ensure the fund received a top AAA credit rating, such as the build-up of a cash reserve and a pledge from member countries to pay up to 20 percent more than their agreed shares of the fund.

"I am confident we will get the best possible rating, maybe some time in August," said Regling.

"I think the point that 16 finance ministers of mature economies promise to do whatever is necessary to get the best rating is worth a lot."

Eurozone governments agreed to set up the fund as part of a trillion-dollar "backstop" facility in conjunction with the IMF in May, in an attempt to calm fears over mounting debts in some countries, such as Spain and Portugal, in the wake of the Greek debt crisis.

Regling also stressed countries which do use the fund would face strict conditions.

"It does not mean there is an ATM machine. Everyone agrees that countries only get money when they accept conditionality."

© 2010 AFP

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