Head of bailout fund wants big Eurozone pot

A HIGHER lending capacity for the Eurozone’s rescue fund would help to reassure markets, the head of the bailout fund said yesterday.

The German government is believed to be about to bow to international pressure to bolster the fund.

“More money would reassure markets. Wrongly or rightly the fact is that big numbers in the shop window create calm,” Klaus Regling, head of the temporary European Finance and Stability Facility (EFSF), told Germany’s Focus magazine.

Eurozone finance ministers meet in Copenhagen on 30-31 March and are due to decide whether to increase the lending capacity of the bailout fund above a current €500bn.

Italian Prime Minister Mario Monti said in an interview yesterday: “The higher the firewalls, the less likely it is that they have to be actually used.”

Regling went on to challenge popular opposition in Germany to more money for the rescue fund.

“The bailouts haven’t cost German taxpayers a penny. The belief that this money is gone and will never come back is wrong. These are loans”.