LONDON Nov 11 The head of the euro zone's
rescue fund Klaus Regling believes this week's market upheaval
in Europe has made it difficult to increase the bloc's 440
billion euro bailout fund to 1,000 billion, the Financial Times
reported on Friday.
Euro zone countries had hoped to leverage the European
financial stability facility fund by December, but that
possibility has been reduced by the problems in the bloc this
week, the newspaper paraphrased Regling as saying.
Investors have fled from bonds issued by highly indebted
countries and luring them back by offering insurance on losses,
the centrepiece of a plan agreed in Brussels on October 26,
would now probably use up more of the fund's resources, the
article cites Regling as saying.
"The political turmoil that we saw in the last 10 days
probably reduces the potential for leverage. It was always
ambitious to have that number, but I'm not ruling it out," he
is quoted as saying.
Regling said, according to the article, that heightened
investor skittishness meant the guarantees would now have to be
bigger in order to convince investors to participate, meaning
the fund was likely to have only three to four times the
"At least for a while, maybe the leverage is less than what
we hoped three weeks ago. My expectation is it will get better
because we do have a new government in Greece, and that helps."