Reuters/Yahoo News
March 14, 2011
The euro zone is likely to increase guarantees for its bailout fund to boost its effective lending capacity, Eurogroup President Jean-Claude Juncker said on Monday, but a deal was likely only next week.
Euro zone leaders agreed early on Saturday that the capacity of the European Financial Stability Facility (EFSF) should be raised to its full nominal value of 440 billion euros from the current 250 billion, but left it to ministers to work out how.
The effective capacity of the EFSF is currently lower than the nominal value because not all euro zone countries issuing guarantees have the triple A rating that the fund wants.
"We are discussing ways and means how to return to the initial level of 440 (billion euros). Will this be done by guarantees or could there be other means? My present feeling is that this will be done by guarantees," Juncker told a news conference after the ministers' meeting.
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