Euro zone to leverage EFSF by 4 times to 1 trillion euros
Euro zone leaders intend to scale up their emergency fund, the European Financial Stability Facility, to around 1.0 trillion euros (871 billion pounds), EU sources said on Wednesday.
The sources said the 440 billion fund, set up last year, would have about 250-275 billion euros available after amounts are set aside for aid to Greece, Ireland and Portugal and for the recapitalising the region's banks.
That amount would be leverage around four times, arriving at a headline figure of 1.0 trillion.
The ratio of the leverage will be of at least 4 times, one source said, while another said the spare capacity available to be leveraged was 250 billion to 275 billion.
The exact amount of capital available for leverage will only be known once negotiations over a second bailout package for Greece are agreed. Part of the problem is agreeing on credit enhancements for the private sector. More credit enhancement will reduce the amount of funds in the EFSF for leveraging.
(Reporting by Yann Le Guernigou, Julien Toyer, Ilona Wissenbach and John O'Donnell; Writing by Luke Baker)
© Copyright Thomson Reuters 2024. All rights reserved.