EU strikes deal for 700-billion-euro financial rescue fund
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| source: AFP |
"We agreed on all aspects of the European Stability Mechanism," said Juncker, who heads the Eurogroup of finance ministers from the 17 states that share the single currency, after talks between all 27 EU members in Brussels.
The permanent emergency rescue mechanism for eurozone countries, which replaces the existing, 440-billion-euro European Financial Stability Fund as of January 1, 2013, will be created by a special treaty among eurozone states and based in Luxembourg like its predecessor.
"The mechanism will have access to a capital base of 700 billion ($996 billion)," Juncker spelled out, 80 billion in capital lodged up front backed by 620 billion of guarantees from eurozone states, in order to obtain the best possible credit rating.
It will have an effective lending capacity of 500 billion euros, he underlined.
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