Euro zone finance ministers recently started a two-day conference on the euro zone debt crisis, with obvious tension and division regarding the expansion of the remit of bailout funds.
In addition to discussing the bailout remit, the ministers also discussed various proposals to leverage European Financial Stability Facility (EFSF) assets to improve the organization’s ability to influence UK bond markets. However, this attempt to leverage assets was overshadowed by what officials called the most immediate priority – to ensure that previous EFSF reforms are excepted by all of the 17 members of the euro zone.
Every single-currency country in the euro zone other than the Netherlands, Slovakia, and Malta have approved the original reforms, which are designed to increase the lending capacity of the EFSF. Of these three countries, EU leaders are mostly concerned that the Slovakian government will be unable to secure authoritative and legislative support to pass the recent forms.
With an increasingly difficult debt crisis threatening the financial stability of both Italy and Spain, having considerable resistance from three euros on a members could create yet another obstacle in an ongoing Euro zone crisis.
Nonetheless, official sources say that financial ministers will begin discussing new plans for additional reforms at an upcoming summit, in which ministers are expected to present an advance preparatory plan to deal with the current euro zone crisis.
Even so, the German financial minister was adamant about the fact that the first set of reforms should be implemented before focusing on getting the EFSF even more authoritative privileges. While most financial professionals doubt that these leveraging proposals could single-handedly solve the debt crisis, ministers stressed that incremental changes like this are crucial in solving the problem and safeguarding from similar debt crises in the future.