BRUSSELS (MNI) – The European Financial Stability Facility (EFSF)
will not engage in any pre-funding, Klaus Regling, chief executive of
the Facility, said Tuesday.

Speaking at the AFME/EPDA European Government Bond Conference on
Tuesday, Regling said: “We will not pre-fund. We will only go to the
market when the country will ask for financial assistance. We do not
want to give a wrong signal to raise funds.”

He added that the EFSF had been set up so that it only needed to
become financially operational and active once there was a problem with
one of the Eurozone countries and it received a request for assistance.

Regling also told the conference that the EFSF will exist until
June 2013 unless there is a further crisis affecting a euro area
country. In that case, the EFSF would “exist as long as it takes to pay
all the debt.”

Regling said borrowing costs would be “comparable to the Greek
case, which in turn is comparable to IMF lending.” He added that in the
end there would be a political decision, but the legal framework
establishing the fund stipulates that borrowing costs be in that range.

He said that the IMF has seniority status and that it was
“committed to this political declaration that they will support European
action”. This could amount to as much as 50 pct of what the Europeans
do.

“I have not any reason to believe otherwise,” he said.

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