Financial Times
June 16, 2011
Europe’s emergency bail-out funds should be doubled in size to convince financial markets of governments’ commitment to defending the euro, a senior European Central Bank policymaker has proposed.
Nout Wellink, the Dutch central bank governor, said some €1,500bn ($2,12bn) should be made available if necessary to prevent “contagion effects” spreading from debt crisis-hit countries such as Greece.
He told the Financial Times in an interview: “That safety net should be large enough to frighten the market and to convince the markets that governments are prepared to really defend, to the end of their days, Europe as it is and the monetary union.”
His comments intensify the ECB’s efforts to persuade eurozone governments to step up their response to the escalating crisis over Greece. Under current arrangements, the European Union has some €750bn in bail-out funds, comprising €440bn from the year-old European financial stability facility, €60bn in other EU funds and €250bn from the International Monetary Fund.
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