Instant view: EZ aims to leverage EFSF "several fold": draft

(Reuters) - The euro zone aims to leverage its 440 billion euro bailout fund, the EFSF, "several fold" but finance ministers will only agree the details of how that will be done in November, according to a draft statement to be issued after a summit on Wednesday.

COMMENTS:

JURGEN ODENIUS, PRINCIPAL OF INTERNATIONAL ECONOMICS AND

INVESTMENT STRATEGY, PRUDENTIAL FIXED INCOME, NEWARK, NEW JERSEY

"We still don't know the real bailout cost for Greece. After you estimate the existing commitments for Greece, Portugal and Ireland, you have about 250 billion euros of EFSF capacity left, which you could lever up.

"On a conservative basis, you want to lever it up to about 1 trillion euros so it could cover Belgium, Italy and Spain with enough funding through 2013.

"This is a tightrope. I do see a positive scenario, but nothing is set in stone.

"There is still the risk that the voluntary debt restructuring would not happen and Greece could default.

"Another risk is that EFSF leverage takes off. If it does so, that would have to take into account of the rating agencies and their view on sovereign ratings and whether there would be any European sovereign downgrades."

RAVI BHARADWAJ, MARKET ANALYST, TRAVELEX GLOBAL BUSINESS PAYMENTS, WASHINGTON

"Overall, while there are no specific details, at least this appears to be a sign in the right direction and hopefully also a sign of unity among the EU.

"A lot of people were expecting more clarity today and that doesn't seem to really be the case. I think the statement really is not meeting up to market expectations and that's why you're not seeing the euro really take off the $1.39-$1.40 level. I think we're still going to have this range trade prevailing over the short term."

KIM RUPERT, MANAGING DIRECTOR OF FIXED INCOME ANALYSIS, ACTION ECONOMICS, SAN FRANCISCO

"We are reacting to every headline these days. It seems there is still a lot of uncertainty until we see a more definitive statement with real details. But even once we get the details the problems are not going to be fixed any time soon. It is a long road ahead.

The market is reacting to these headlines and some optimism that things are being worked out. It is kind of more of the same, but the market is having to react to all of these headlines, like it or not."

JAMES BARNES, SENIOR FIXED INCOME MANAGER, NATIONAL PENN INVESTORS TRUST COMPANY

"Even when the plan is laid out, it does not necessarily mean that everything from then on will be very smooth. Volatility will continue in the markets. But if U.S. economic data start to point to a more robust U.S. economy, developments overseas will have less impact on our markets.

"The sovereign debt crisis has absorbed people's attention. Right now equity markets are up on the news and the bond market is selling off on the EFSF news. But the markets are overreacting both on the upside and the downside. No matter what comes out of this, it doesn't necessarily mean it will be the final game plan.

"There's no easy solution to this. Conditions will change that will warrant a change in the game plan; that's how it's been. It's an evolutionary process."

KEVIN FLANAGAN, CHIEF FIXED INCOME STRATEGIST, MORGAN STANLEY SMITH BARNEY, PURCHASE, NEW YORK

"The headlines seem to be helping stocks and hurting bonds. We could see more selling in Treasuries, but these will only take the markets so far.

"The leveraged EFSF seems to be in the 1 trillion euro area, which is a starting point. If it goes higher, the Treasuries market may react to that.

"The bottom line is that these headlines in themselves are not game changers. It's not providing any new ground for the market. Ultimately the market wants to see concrete details of the plan."

JESSICA HOVERSEN, FOREIGN EXCHANGE ANALYST, MF GLOBAL, NEW YORK

"It's moving in the right direction but it is going to disappoint the market, particularly given the emphasis policy makers put on this meeting."

MARKET REACTION:

STOCKS: U.S. stocks add to gains, S&P 500 near session highs.

BONDS: U.S. bond prices add to losses.

FOREX: The euro trims losses versus dollar