BRUSSELS (MNI) – The European Financial Stability Facility will
turn to the markets up to three times next week and will become a much
more active issuer from now on, its Chief Executive Officer Klaus
Regling said on Monday night.
“We will from now on go frequently to the markets,” Regling told
journalists after a meeting of Eurozone finance ministers here. “Next
week alone we may go three times to issue short term bills, to issue
five-year bonds and possibly also 25 or 30-year bonds. The EFSF will be
in the market from now on, on a very regular basis.”
Since the EFSF will be involved in funding the second Greek rescue
package, agreed to by Eurozone finance ministers on Monday but still
awaiting approval from national parliaments, the Eurozone bailout fund
will need to make disbursements of E100 billion over the next three
years, Regling noted.
The EFSF would raise funds to support payments to Greece of E5.9
billion in March, E3.3 billion in April, and E5.3 billion in May, he
said.
At the finance ministers’ meeting, the 17 Eurogroup countries also
discussed the adequacy of the euro area’s bailout funds, which some
governments and analysts believe need to be much larger.
“Of course we are not out of the woods yet,” said EU Economics and
Monetary Affairs Commissioner Olli Rehn. “We need to complete our crisis
response. Reinforcement of the euro area firewalls is an indispensable
element of it and can be seen as a supplementary counterpart of the
reinforced economic governance.”
Rehn said the European Commission and the EFSF would present
Eurozone governments with options they could pursue to boost the
capacity of their crisis firewalls, adding that he was “confident that
we can reach an agreement on the reinforcement of the euro area
financial firewalls by the end of this month, still in March.”
One option likely to be on the table is to allow the EFSF to
temporarily run alongside its permanent successor, the European
Stability Mechanism, for some period of time – a move that would raise
the EU’s firewalls to a combined E750 billion euros.
Eurozone governments are also keen to boost the war chest of the
International Monetary Fund in the hope that some of that would flow
back to Europe. But key IMF members have said they want to see Europe
dig deeper into its own pockets first before they commit more cash.
Boosting the Eurozone’s firewalls is seen as crucial to shielding
countries such as Spain, Italy and Portugal that are under intense
market scrutiny.
Eurogroup President Jean-Claude Juncker said after the meeting that
Portugal’s economic adjustment program was “going well.” He also said
that his initial impression of additional fiscal measures announced by
the Belgian government on Monday were “good.”
EU Commissioner Rehn said that he welcomed the “very substantial
effort” by Belgium.
–Brussels newsroom: +324-9522-8374; pkoh@marketnews.com
[TOPICS: M$X$$$,M$Y$$$,MGX$$$,M$$CR$,MT$$$$]
