Brussels, 12/02/2013 (Agence Europe) - On Monday 12 February, the head of the Eurogroup, Jeroen Dijsselbloem, said that eurozone finance ministers want to set a cap on the cash available for direct bank bailouts under the European Stability Mechanism (ESM). “On capacity, in order to maintain the ESM capacity for other instruments and the ESM high credit rating, we agreed to explore possibility of defining limits for the various ESM instruments. The ESM should strive to maximise efficiency and provide highest capacity for direct recap without putting additional strains on national budgets. We agreed to explore options where private capital injections could be along side the ESM recapitalisation.” The ESM has a lending capacity of €500 billion.
Dijsselbloem added: “We focused on the overall design of the instrument and its interaction with evolving banking union. The instrument will have to evolve over time as the banking union is completed and responsibilities for the supervision move from the national to the EU level. Key parameters like the burden sharing between the national and the euro area level should reflect this evolving responsibilities”.
Talks will continue on backdating the bank bailouts to cover bailouts already done at national level by Spain and Ireland. European heads of state have urged finance ministers to decide on direct bank bailout guidelines by June. (MB/transl.fl)