Nog geen akkoord ministers van financiën Eurozone over versterking bail-out mechanismen (en)
Eurozone finance ministers met on Monday but still failed to reach agreement on the details of how to share the burden of a boost to the effective lending capacity of European bail-out mechanisms.
Key among divisions is the question of how to support the existing fund, the €440 billion European Financial Stability Mechanism, which due to countries' desire to maintain a triple-A rating for its lending, in reality has just around a €250 billion effective lending capacity.
EU countries employing the single currency on Friday agreed to boost its effective lending capacity to the full €440 billion. The details were left for finance ministers to figure out after the weekend, but divisions remain and the head of the Eurogroup of states, Jean-Claude Juncker i announced following the meeting's break-up that a further discussion will be needed on 21 March, just ahead of a full EU summit three days later intended to tie all the ribbons by the full 27 European member states on a 'comprehensive package' intending to put to bed the ongoing sovereign debt crisis.
Juncker said technical details still needed to be ironed out.
"We continued our discussion about the EFSF including ways to ensure there is effective capacity of €440 billion and that we can intervene on primary markets," he told reporters on Monday evening.
He said he had decided to reconvene the Eurogroup again, "given the technical nature of file and need to get a consistent and sustainable solution, and having looked at various options and differences in views between member states."
A range of options are on the table, including increasing the amount of state guarantees well beyond the €440 billion so as to achieve an effective lending capacity of that amount. Cash contributions are also being considered, but such a move falls heaviest on already cash-strapped nations, particularly amongst those expected to contribute the most.
Juncker hinted that the likely solution will not involve cash infusions.
"My present feeling is that this will be done by guarantees," he said.
A permanent fund, amounting to €500 billion will replace the EFSF in 2013.
Ministers also discussed details of draft reform plans agreed on Friday under the rubric of the 'Euro Pact', radically overhauling public spending rules that affect pensions, wages and state deficits, but little disagreement remains in this quarter.
"There are no big divergences on the draft reform plans," Juncker said.
An informal meeting of all 27 EU states on Monday also took place to finalise agreement on a 'six-pack' of economic governance laws delivering co-ordination of fiscal decision-making in the bloc.