COPENHAGEN (MNI) – The Eurozone finance ministers, known as the
Eurogroup, issued the following statement Friday regarding their
decision to boost the new lending capacity of the permanent rescue fund,
the European Stability Mechanism:

“The stability and integrity of the Economic and Monetary Union
have required swift and vigorous measures that had been implemented
recently, together with further qualitative moves towards a genuine
Fiscal Stability Union.

In order to further improve market confidence and in accordance
with the agreement reached at the Euro Summit on 9 December 2011 and
reiterated on 2 March 2012, we have reassessed the adequacy of the
overall EFSF/ESM lending ceiling of EUR 500 billion which, given EUR 200
billion long term commitments of the EFSF, currently entails a 300
billion maximum lending volume for the ESM.

We agreed on the following principles:

— The paid-in capital of the ESM will be made available more
quickly than initially foreseen in the ESM Treaty, in respect of
national procedures. Two tranches of capital will be paid in 2012, a
first one in July, a second one by October. Another two tranches will be
paid in 2013 and a final tranche in the first half of 2014. In line with
the ESM Treaty, the payment of the capital will be further accelerated
if needed to maintain a 15% ratio between the paid-in capital and the
outstanding amount of ESM issuances.

— The ESM will be the main instrument to finance new programmes as
from July 2012. The EFSF will, as a rule, only remain active in
financing programmes that have started before that date. For a
transitional period until mid-2013, it may engage in new programmes in
order to ensure a full fresh lending capacity of EUR 500 billion.

— The current overall ceiling for ESM/EFSF lending, as defined in
the ESM Treaty, will be raised to EUR 700 billion such that the ESM and
the EFSF will be able to operate, if needed, as described above. As of
mid-2013, the maximum lending volume of ESM will be EUR 500 billion. The
combined lending ceiling of the ESM and the EFSF will continue to be set
at EUR 700 billion.

— In addition EUR 49 billion out of the EFSM and EUR 53 billion
out of the bilateral Greek loan facility have already been paid out to
support current programme countries. All together the euro area is
mobilising an overall firewall of approximately EUR 800 billion, more
than USD 1 trillion.

— Moreover, euro area Member States have committed to provide EUR
150 billion additional bilateral contributions to the IMF. The euro area
made substantial progress over the past 18 months to address the
challenges stemming from the sovereign debt crisis. Progress was notably
made with regard to fiscal consolidation and growth enhancing structural
reforms in a number of countries, the successful implementation of the
adjustment programmes in Ireland and Portugal, the Greek PSI operation
and the agreement on a second Greek programme. Important improvements
were made to improve the governance of the euro area through
enhancements of the Stability and Growth Pact, the new macro-economic
imbalances procedure, the Euro Plus Pact and the Fiscal Compact
enshrined in the new Treaty on Stability, Cooperation and Governance in
the Economic and Monetary Union. Finally, robust firewalls have been
established. This comprehensive strategy has paid off and led to a
significant improvement of market conditions.”

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