EU leaders agree to boost bailout fund to over $600 bln

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Leaders of 17 European Union states agreed to increase the capacity of the European Financial Stability Facility (EFSF) from the current 250 billion euro (about $350 billion) to 440 billion euro (more than $600 billion).

Leaders of 17 European Union states agreed to increase the capacity of the European Financial Stability Facility (EFSF) from the current 250 billion euro (about $350 billion) to 440 billion euro (more than $600 billion).

EFSF was set up in May last year and used to bail out Ireland.

The new permanent European bailout fund, the European Stabilization Mechanism (ESM), will have an overall effective lending capacity of 500 billion euro ($695 billion).

In addition, participants of the summit also resolved to extend the maturities of the credit to Greece from three to seven years and to adjust the interest rate on its loans by 100 basis points.

"Pricing of the EFSF should be lowered to better take into account debt sustainability of the recipient countries, while remaining above the funding costs of the facility, with an adequate mark up for risk, and in line with the IMF pricing principles," the Council of the European Union said on its website.

 

BRUSSELS, March 12 (RIA Novosti)

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