Brussels, 28/01/2014 (Agence Europe) - The Eurogroup is hoping to finalise by the end of February the details of how the European stability mechanism (ESM) will directly recapitalise failing banks.
“In the next meetings, we will seek to finalise the operational framework for the ESM direct recapitalisation instrument, on which we already reached an agreement on the main features last June”, said the head of Eurogroup, Jeroen Dijsselbloem, on Monday 27 January. French Economy Minister Pierre Moscocivi said that March 2014 was the Eurogroup's deadline, noting that he and the German finance minister, Wolfgang Schäuble, had agreed to flesh out the proposal. The ESM will have €60 billion set aside for direct recapitalisation of banks in order to weaken the connection between failing banks and sovereign debt. The mechanism would not come onstream until the ECB takes over direct supervision of the 130 biggest banks in the eurozone in November. Moscovici said the mechanism would be in addition to other instruments planned for dealing with shortcomings highlighted by the asset quality review, but would not require any changes to be made to the ESM mechanism. (MB/transl.fl)