“European governments moved to bolster their rescue funds, seeking to shield Spain and Italyfrom the fallout of the debt crisis without alienating bailout- weary voters in wealthy countries.
Finance ministers neared an agreement to run the temporary and permanent funds in parallel until mid-2013, potentially raising the upper limit on emergency lending to 940 billion euros ($1.3 trillion). Amounts immediately available would range between 340 billion euros and 640 billion euros.
“I can imagine that both instruments run in parallel so that automatically we have a higher sum overall,” Austrian Finance Minister Maria Fekter told reporters before a meeting of European finance ministers in Copenhagen today.
European policy makers are trying to strike a balance between meeting international demands for a more powerful war chest and opposition in donor countries led by Germany to providing additional aid for underperforming economies on the region’s fringes.
Today’s step will lift the maximum aid sum from 500 billion euros. It involves running the 500 billion-euro permanent European Stability Mechanism alongside the 200 billion euros committed by the temporary fund to Greece, Ireland andPortugal, according to a draft statement prepared for the meeting….”
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