ROME, Dec 16 (Reuters) - 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 said.
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 programme.
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.”