BRUSSELS (MNI) – A mechanism to provide loans to troubled Eurozone
members, known as the European Financial Stability Fund, or EFSF, will
soon become fully operational and is already available if an emergency
situation arises, Jean-Claude Juncker, Luxembourg Prime Minister and
head of the euro-using currency club, the Eurogroup, said on Monday.
Eurozone members agreed to set up the E440 billion fund earlier
this year in a bid to ease market concerns that some of the 16 member
states could default on their sovereign debts.
The fund’s chief executive is Germany’s Klaus Regling, former
director-general of the European Commission’s economic and financial
affairs unit. Deutsche Finanzagentur, the German debt management office,
will issue debt on behalf of the EFSF if required.
Regling, who attended the press conference after a meeting of
Eurozone finance ministers here, said that the EFSF wouldn’t be issuing
debt unless one of the member states asked for help, because there
wasn’t the political will to do so. Some market participants have
suggested that the EFSF could issue a small amount of debt to “test the
waters” and get a credit rating.
Juncker said the Eurogroup had “invited” Slovakia – the only member
of the 16-nation Eurozone yet to sign the EFSF deal – to “proceed
swiftly with the last signature.”
He said the fund would “soon enough become fully operational.”
–Brussels: 0032 487 (0) 32 803 665, echarlton@marketnews.com
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