June 11, 2012 / 10:36 AM / 8 years ago

Spain more likely to tap ESM bailout fund-German govt

BERLIN, June 11 (Reuters) - Spain is more likely to tap the euro zone’s new permanent bailout facility, the European Stability Mechanism (ESM), than the current vehicle, the European Financial Stability Facility (EFSF), a spokesman for the German Finance Ministry said.

The 17-nation euro zone agreed on Saturday to lend Spain up to 100 billion euros for its bank rescue fund in an attempt to reassure investors and erect a new firewall in the currency bloc’s sovereign debt crisis.

But it remains unclear exactly how much help Spain will seek and whether the loans will come from the temporary EFSF or from the ESM, which is due to come into effect on July 1.

“The ESM is a more likely option than the EFSF... The ESM is in almost every regard more effective than the EFSF,” spokesman Martin Kotthaus told a regular news conference.

German government spokesman Steffen Seibert told the same news conference the timing of Spain’s formal application for assistance would determine whether the funds came from the EFSF or from the ESM.

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