The strike force the Fund to support countries in difficulty to the euro area (EFSF) reach "probably not" the amount of 1.000 billion euros initially planned, due to the deteriorating situation on the markets, acknowledged Tuesday night Jean-Claude Juncker. "We have not reviewed the goals down but conditions have changed, so probably it will not be 1000 billion but less, but still (one digit) substantial," said the leader of finance ministersMonetary Union on the sidelines of a meeting in Brussels. "It is not possible to give an exact figure because the circumstances have worsened in recent weeks since the last Summit (European). It is virtually impossible, if we want to keep a straight face, to give a figure," did he insisted to reporters.
Finance ministers from the euro area agreed Tuesday night to increase the firepower of their Relief Fund (EFSF) via a system of partial insurance of loans to investors fragile monetary union, but without giving a figure to assess its capacity. Yet the last summit of EU leaders on the subject in late October, had set a target amount up jsuqu'à 1000 billion euros, in the hope at the time to reassure financial markets about the ability of the areaeuro to build a firewall against the compelling contagion of the debt crisis in countries like Italy or Spain.
Meanwhile, the crisis has worsened, threatening to win including countries such as France or Germany. So the market investors are more wary of investing in the debt of the monetary union. "The exact amount of the strike force will depend on the Fund increased its use of the instruments used and the exact degree of protection it needs to evolve and provide between 20 and 30%", merely stated in the EFSF a document issued after a meeting of finance ministers from the euro area (Eurogroup). Clearly, the initial idea to multiply by four or five some 250 billion euros of own resources still available in the Fund, effective capacity of a loan from 440 billion euros has been abandoned.
Regarding the security system of the EFSF, the exact rate of protection for investors who lend money to troubled countries "depend on the situation and market conditions," said the boss of the EFSF, Klaus Regling at a press conference. It will be applied for emissions of new debt and will aim to increase demand for new bonds and lower borrowing rates, said the statement issued by the EFSF. Another option for the EFSF aims to attract outside investors in a structure built against the fund, then buy the debt of troubled countries on the primary market or secondary flows where the debt already outstanding. It may also be used to refinance the banks. These two options can be combined, said EFSF.
by http://businesnew.blogspot.com/
Finance ministers from the euro area agreed Tuesday night to increase the firepower of their Relief Fund (EFSF) via a system of partial insurance of loans to investors fragile monetary union, but without giving a figure to assess its capacity. Yet the last summit of EU leaders on the subject in late October, had set a target amount up jsuqu'à 1000 billion euros, in the hope at the time to reassure financial markets about the ability of the areaeuro to build a firewall against the compelling contagion of the debt crisis in countries like Italy or Spain.
Meanwhile, the crisis has worsened, threatening to win including countries such as France or Germany. So the market investors are more wary of investing in the debt of the monetary union. "The exact amount of the strike force will depend on the Fund increased its use of the instruments used and the exact degree of protection it needs to evolve and provide between 20 and 30%", merely stated in the EFSF a document issued after a meeting of finance ministers from the euro area (Eurogroup). Clearly, the initial idea to multiply by four or five some 250 billion euros of own resources still available in the Fund, effective capacity of a loan from 440 billion euros has been abandoned.
Regarding the security system of the EFSF, the exact rate of protection for investors who lend money to troubled countries "depend on the situation and market conditions," said the boss of the EFSF, Klaus Regling at a press conference. It will be applied for emissions of new debt and will aim to increase demand for new bonds and lower borrowing rates, said the statement issued by the EFSF. Another option for the EFSF aims to attract outside investors in a structure built against the fund, then buy the debt of troubled countries on the primary market or secondary flows where the debt already outstanding. It may also be used to refinance the banks. These two options can be combined, said EFSF.
by http://businesnew.blogspot.com/
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