Euro bailout fund rejig is set for March

EUROZONE finance ministers called yesterday for an increase in the effective lending capacity of the currency bloc’s rescue fund, but German finance minister Wolfgang Schaeuble said there was no urgency and it would be March before a firm plan was in place.

Schaeuble said that with bond markets calmer, there was no rush to take action now and work was being prepared for a late March EU summit.

“There will not be results today, the market developments in the last week have, thank God, taken any urgency out of these discussions,” he said.

Schaeuble’s comments came as Eurozone finance ministers gathered in Brussels yesterday to thrash out proposals for a regional rescue package ahead of a European Council meeting next week.

The meeting came as the European Financial Stability Facility (EFSF), Europe’s main bailout fund, said that it had appointed financial advisers for its first sale of debt on Monday.

Citigroup, HSBC and Societe Generale will advise on the deal, which will involve an auction of €3 to €5bn of debt in order to fund the €85bn bailout of Ireland.

At the meeting of finance ministers, Holland’s Jan Kees de Jager indicated that the Eurozone’s more stable countries could be willing to fund an expansion in the region’s rescue fund, something that has so far been blocked by France and Germany.

“If needed, we will stand ready with an emergency fund to assist a country that needs it,” he said.

But he added: “The emergency fund, only, will not be a solution, we need fiscal consolidation.”