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21 Jun 2013
Eurogroup fixes rules for the European Stability Mechanism
FXstreet.com (Barcelona) - The Eurozone Finance Ministers decided on Thursday that the European Stability Mechanism (ESM) would be able to recapitalize distressed banks directly, but they limited such investments to 60 billion euros per case.
The Eurogroup also agreed that national Eurozone governments should provide 20% of the capital needed to rescue the financial institution under their supervision. The contribution could go down to 10% two years after the activation of the recapitalization plan.
Finally, Eurogroup head Jeroen Dijsselbloem indicated that it would be up to the Eurozone Member States whether or not to apply for the bailout loans and that the decision to grant them would be “decided case-by-case and by mutual agreement.”
The Eurogroup also agreed that national Eurozone governments should provide 20% of the capital needed to rescue the financial institution under their supervision. The contribution could go down to 10% two years after the activation of the recapitalization plan.
Finally, Eurogroup head Jeroen Dijsselbloem indicated that it would be up to the Eurozone Member States whether or not to apply for the bailout loans and that the decision to grant them would be “decided case-by-case and by mutual agreement.”