ROME Dec 16 Around 600 billion euros are
available to fight the euro zone's debt crisis, a greater amount
than Italy and Spain's combined funding needs for 2012, and more
will be provided in March if needed, the head of Europe's
bailout fund said on Friday.
Financial markets have questioned whether the European
Financial Stability Facility will be able to muster enough
funding to contain the euro zone's sovereign debt crisis as it
spreads to major economies such as Italy.
But the fund's chief Klaus Regling told a conference in
Rome: "If Italy and Spain were to ask for support, their gross
financing needs for 2012 are less than that (600 billion euros),
and I don't think they would need to be taken off the market."
The EFSF has about 400 billion euros ($520 billion) in
uncommitted funds, and the International Monetary Fund "has
always said it would come with 200 billion euros," Regling said.
The European fund has "huge short term lines of credit with
banks" and will go to the bond market again in January, Regling
If there's a need for more funds, they can be allocated in
March, he added.
"The (EU leaders') summit said it would review amounts in
March, if most has been used by then, and I don't think it will
be, then I'm sure more will be made available. European leaders
and euro zone leaders will do what is needed to preserve the
euro and financial stability," he said.
Efforts to leverage the EFSF have not been fully successful,
he acknowledged, but would continue.
"We don't know how much leverage will be possible, but there
will be some, and the IMF will be there if we need it," he said.
Regling said a "staggering amount" of more than 1 trillion
euros had already been spent on trying to solve the debt crisis,
and around 100 billion euros may be needed for the second Greek
He estimated that as much as 50 billion euros may be
requested to help recapitalise banks.
He said he found it "a bit surprising that I read every day
... that all these amounts are just insufficient and only the
ECB can do it."