Financial Times
September 20, 2011
If the eurozone is able to get over the short-term hurdles it faces – getting Greece €8bn in much-need aid and passing new enhancements to its bail-out fund through 17 national parliaments – officials will once again face a question that has dogged them for months: where will the money for the new rescue system come from?
Although the question has not figured prominently in parliamentary debates about the overhauled system, which would give the eurozone’s €440bn ($602bn) rescue fund powers to recapitalise banks and buy bonds of struggling states, behind closed doors the debate among officials is raging.
Many European policymakers are beginning to envisage the fund, known formally as the European financial stability facility, as a nascent eurozone treasury that could sit alongside the European Central Bank. It would be quickly tapped to deal with crises without relying on national parliaments, which cannot act at the speed demanded by markets.
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