FRANKFURT (MNI) – Eurozone policymakers should recognize that
Portugal and Ireland may need additional bailout packages totaling E180
billion, former European Central Bank Executive Board member Lorenzo
Bini Smaghi said in a piece published Thursday.
To ensure that Greece indeed remains an exception, as policymakers
have insisted it is, they need to build an effective firewall, Bini
Smaghi said in a contribution to the Financial Times’ website.
“First, it should be recognized right away that Portugal may not be
able to return to the markets next year and needs an additional bailout
package. If it is unable to finance itself until 2016, it will need
approximately E100 billion,” Bini Smaghi said.
He noted that the European Financial Stability Facility has
sufficient capability to provide these funds.
“Second, the same could be done for Ireland, which requires an
additional E80 billion. The procedure to allocate these funds should be
started right away by the national and European authorities,” Bini
Smaghi argued.
Finally, the former ECB official said that the size of the European
bailout fund should be boosted further and Eurozone policymakers should
seek to gain sufficient support from other countries to ensure an
increase of the International Monetary Fund’s resources at the upcoming
Spring Meetings in Washington, D.C.
— Frankfurt newsroom: +49-69-720142; email: jtreeck@marketnews.com
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