EFSF will meet €440bn lending target, says Juncker
President of the Eurogroup and prime minister of Luxembourg Jean-Claude Juncker (pictured) has stated the European Financial Stability Facility (EFSF) will meet its lending capacity target of €440bn.
Juncker’s announcement defies critics who believe the EFSF will struggle to raise €440bn following its credit rating cut by S&P, which also recently downgraded several eurozone members including France and Austria.
“S&P’s decision will not reduce EFSF’s lending capacity of €440 billion. EFSF has sufficient means to fulfil its commitments under current and potential future adjustment programmes and will continue to be backed by unconditional and irrevocable guarantees by euro area member states,” Juncker declared.
In December 2011 heads of state and government decided to advance the introduction of the permanent European Stability Mechanism (ESM) to July 2012.
Juncker argued that “the ESM will have its own capital base and thus be less affected by ratings of euro area member states. The adequacy of the overall lending ceiling of the EFSF/ESM of €500bn will be reassessed by March 2012.”
Eurogroup meetings are attended by the Eurogroup president, the finance minister of each member state of the euro area, the commissioner for economic and monetary affairs, and the president of the European Central Bank.
Its mission includes budgetary policy coordination, the specification of budgetary exit strategies and the implementation of the stability and growth pact (SGP); broader economic surveillance as regards competitiveness and macroeconomic; the euro on the international stage and the enlargement of the euro area and the management of the convergence process.