Officials from the European Union are considering expanding the scope of the eurozone’s €440 billion bailout fund to include the purchase of bonds from countries burdened with sovereign debts, according to Financial Times. The change would use the European Financial Stability Facility (EFSF) to replace the European Central Bank in scooping up distressed sovereign debts as part of an effort to contain borrowing costs and prevent a government default. The measure has strong support from the ECB and the European Commission, as well as French officials.
The President of the EC, José Manuel Barroso, said an overhaul of the EFSF is at the top of the European agenda, and called for a deadline for officials to “reinforce” debt crisis containment measures before the next European summit in just over two weeks. Germany has been reluctant to back the proposed change, with the country’s Chancellor Angela Merkel calling for “closer economic coordination.” The talks come as yields on Belgian bonds spiked, raising concerns about the spread of debt woes from countries on the periphery closer to the center of the monetary union.
Click here to read the story on EFSF changes from Financial Times.
Click here for coverage of Belgain debt trouble from Financial Times.