BRUSSELS (MNI) – The European Commission said Thursday that it
expected that all 17 of the euro area’s member states to approve by
mid-October the enhancements to the currency union’s bailout fund, the
EFSF, agreed at the July 21 summit.
The statement followed approval of the changes on Thursday by
Germany’s lower house of parliament, the Bundestag, and their passage on
Wednesday in the parliaments of Finland and Slovenia.
All the national parliaments of the euro area need to approve the
changes, which include an increase in the lending capacity of the fund
to E440 billion, along with greater flexibility to buy distressed
sovereign bonds, recapitalize banks and provide pre-emptive financing to
countries with reduced access to market funding.
While ratification is expected to be easily approved in most
countries, tough votes are expected in the Netherlands and Slovakia,
where parties in the governing coalitions have threatened to vote ‘no.’
EU officials, including the President of the European Commission,
Jose Manuel Barroso, have urged EMU governments to agree to the EFSF
enhancements before EU leaders meet at a summit in Brussels on October
While Eurozone governments have yet to implement all the crisis
response measures they agreed in July, continued market tensions since
then have forced them to contemplate further actions, including yet more
funding for the EFSF, including the possible use of leverage, and
additional fortifications to fiscal and economic governance rules.
Euro area finance ministers are expected to discuss these ideas at
a meeting in Luxembourg next week.
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