Monday

20th Mar 2023

EU ministers to double lending power of bail-out fund

  • Homeless people in Madrid: the extra lending clout comes in the context of fears about Spanish solvency (Photo: AntarticoNorte)

Eurozone finance ministers have backed a doubling of the full lending capacity of a future EU bail-out fund.

As of 2013, the European Stability Mechanism, a permanent rescue mechanism to replace the bloc's current bail-out arrangement, will have an effective lending capacity of €500 billion, Luxembourgish Prime Minister Jean-Claude Juncker, the chief of the group of EU member states that use the single currency, said late on Monday (14 February) night.

Read and decide

Join EUobserver today

Become an expert on Europe

Get instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

Speaking to reporters, he said he was convinced the sum should be substantial enough to soothe markets.

"I would think that this will be enough," he said.

Currently, the temporary rescue arrangements have a headline figure of €440 billion attached to the pool, but in reality have what is called an 'effective' lending capacity of around €250 billion.

This is because most of the money has to be kept back as collateral.

Details of how the eurozone will be able to deliver such a level of effective lending capacity was kicked into the long grass however, to be decided upon in the coming weeks.

EU leaders have set themselves a deadline of 25 March, the second day of the bloc's spring summit of premiers and presidents, to agree the details.

Further meetings of eurozone finance chiefs are scheduled for 11 March and possibly 21 March.

Finance ministers already agreed that the size of the ESM would be up for review every two years, however.

The fact that Germany, Europe's biggest lender, has given the nod to a hike in the fund's lending capacity, also suggests that support for its long-demanded quid pro quo, deeper liberal economic reforms, is gaining ground.

Mr Juncker conceded as much on Monday, saying that additional discussions will be necessary to ensure robust oversight of member-state spending decisions.

'Final warning' to act on climate change, warns IPCC

The United Nations's report — synthesising years of climate, biodiversity, and nature research — paints a picture of the effects of global warming on the natural world, concluding there is "no time for inaction and delays."

EU launches critical raw materials act

The EU presented its strategy to ensure access to critical raw materials needed for clean technologies. No country should supply more than 65 percent of any key material. Currently, China dominates almost all rare earth metal markets.

'The race is on', EU Commission warns on green tech

The EU Commission is expected to detail its plans on Thursday as part of the Net-Zero Industry Act on industrial incentives, and the Critical Raw Materials Act, which seeks to reduce EU over-reliance on China.

Looser EU fiscal rules agreed, with 'country-specific' flexibility

EU finance ministers agreed on new spending rules, copying much of previously existing rules. One worry is that only three countries — Sweden, Denmark and Luxembourg — could currently afford to meet green commitments while meeting debt and deficit rules.

Latest News

  1. 'Final warning' to act on climate change, warns IPCC
  2. 'No one is unemployable': the French social experiment
  3. Why can't we stop marches glorifying Nazism on EU streets?
  4. Op-ed debate: Should NGOs be subject to stricter transparency regulation?
  5. 'Forever chemicals' industry hit by perfect storm
  6. EU summit zooms in on global roles This WEEK
  7. EU launches 'Hydrogen Bank' — but what is it?
  8. MEPs probing spyware 'stonewalled' by EU states

Stakeholders' Highlights

  1. Nordic Council of MinistersNordic and Baltic ways to prevent gender-based violence
  2. Nordic Council of MinistersCSW67: Economic gender equality now! Nordic ways to close the pension gap
  3. Nordic Council of MinistersCSW67: Pushing back the push-back - Nordic solutions to online gender-based violence
  4. Nordic Council of MinistersCSW67: The Nordics are ready to push for gender equality
  5. Promote UkraineInvitation to the National Demonstration in solidarity with Ukraine on 25.02.2023
  6. Azerbaijan Embassy9th Southern Gas Corridor Advisory Council Ministerial Meeting and 1st Green Energy Advisory Council Ministerial Meeting

Join EUobserver

Support quality EU news

Join us