European governments are exploring speeding the setup of a permanent rescue fund as the urgency to halt the sovereign debt crisis mounts, an internal working paper shows.
Drawing on paid-in capital, the fund will wield a 500 billion-euro ($677 billion) war chest that could help shield countries like Italy. It also includes provisions for sharing costs with bondholders for countries with “unsustainable” debt.
Senior finance officials next week will examine the cost advantages of creating the fund, known as the European Stability Mechanism, in July 2012, a year ahead of schedule, according to a staff paper prepared for the meetings and obtained by Bloomberg News. Equities advanced with the Standard & Poor’s 500 Index adding 0.3 percent at 3:09 p.m. in New York.
As Greece’s prospects darken and the 18-month debt crisis threatens to tip Europe back into a recession, the euro area’s managers have gone into overdrive in pursuing measures to contain its spread.
Faster ESM enactment would yield a “more effective financing structure” that cuts the extra debt of donor countries by 38.5 billion euros, saving Germany alone 11.5 billion euros, the paper said. “This gain is to be considered as a minimum,” it said.
http://www.bloomberg.com/news/2011-09-23/europe-weighs-speedier-enactment-of-permanent-rescue-fund-to-stem-crisis.html
Drawing on paid-in capital, the fund will wield a 500 billion-euro ($677 billion) war chest that could help shield countries like Italy. It also includes provisions for sharing costs with bondholders for countries with “unsustainable” debt.
Senior finance officials next week will examine the cost advantages of creating the fund, known as the European Stability Mechanism, in July 2012, a year ahead of schedule, according to a staff paper prepared for the meetings and obtained by Bloomberg News. Equities advanced with the Standard & Poor’s 500 Index adding 0.3 percent at 3:09 p.m. in New York.
As Greece’s prospects darken and the 18-month debt crisis threatens to tip Europe back into a recession, the euro area’s managers have gone into overdrive in pursuing measures to contain its spread.
Faster ESM enactment would yield a “more effective financing structure” that cuts the extra debt of donor countries by 38.5 billion euros, saving Germany alone 11.5 billion euros, the paper said. “This gain is to be considered as a minimum,” it said.
http://www.bloomberg.com/news/2011-09-23/europe-weighs-speedier-enactment-of-permanent-rescue-fund-to-stem-crisis.html
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