BERLIN, Nov 28 (Reuters) - A leveraging of the euro zone rescue fund by a factor of 4-5 is no longer possible due to market conditions, the head of the European Financial Stability Facility (EFSF) told German coalition lawmakers on Monday, according to a source.
Klaus Regling told government lawmakers the originally expected leverage factor of 4 to 5 was "no longer reachable because of the clear deterioration of the market environment," a coalition source citied him as saying.
The EFSF chief executive met members of Merkel's centre-right coalition in Berlin before appearing at a hearing for the parliamentary budgetary committee.
Merkel's budget spokesman in parliament Norbert Barthle told reporters before the full budget committee hearing the leverage factor would be up to market analysts to decide.
"But when these instruments come on the market they certainly won't reach a factor of 5 as was originally wished. The leverage factor could be 3-4 times if we get an insurance level of 20-30 percent."