LIVE TV
ZEE Business
ZEE BUSINESS
हिंदी में पढ़ें  हिंदी में पढ़ें
Live TV
Live TV
  • Home
  • Budget 2021
  • Personal Finance
    • PPF
    • Mutual Funds
    • Income tax
    • EPFO
    • Income Tax Calculator
    • Personal Loan Calculator
    • Car Loan Calculator
    • Home Loan Calculator
    • SIP calculator
    • SWP Calculator
    • MF Returns Calculator
    • Lumpsum Calculator
  • India
    • Companies
    • Property
    • Startups
    • Uidai
  • Economy
    • Aviation
  • Tech
    • Mobiles
    • Apps
  • Auto
    • Cars
    • Bikes
  • Markets
    • Commodities
    • Currency
  • Jobs
  • Indian Railways
  • World
    • Economy
    • Politics
    • Markets
  • videos
  • photos
  • Authors
  • More ...
    • VIDEOS
    • PHOTOS
Business News » World News

Euro zone debates bailout fund future, sees backstop, crisis prevention role

  • Twitter
  • Facebook
  • Linkedin
  • whatapp
Updated: Tue, Oct 10, 2017
01:13 am
Reuters
RELATED NEWS
Expert Views: BIG! India's retail inflation eases to 4.59% in December Expert Views: BIG! India's retail inflation eases to 4.59% in December
Budget 2021 Expectations – HOME BUYERS to benefit if Govt accepts this demand; JLL CEO lists following demands Budget 2021 Expectations – HOME BUYERS to benefit if Govt accepts this demand; JLL CEO lists following demands
Jobs, land prices, Covid-19 vaccine, rural India, household savings, NBFCs, banks, consumption, capex - Positives and Negatives | EXPLAINED Jobs, land prices, Covid-19 vaccine, rural India, household savings, NBFCs, banks, consumption, capex - Positives and Negatives | EXPLAINED
Economy, markets, FIIs, chemicals, IT and Pharma - Make money, as India powers to new highs | EXPLAINED    Economy, markets, FIIs, chemicals, IT and Pharma - Make money, as India powers to new highs | EXPLAINED
Setback for China – Trend reversing in favour of India; SFI lands big blow! Know here WHY! Setback for China – Trend reversing in favour of India; SFI lands big blow! Know here WHY!

Euro zone finance ministers discussed on Monday the role of their bailout fund in euro zone integration, with support for the fund to stay owned by governments, play a role in crisis prevention and become a backstop for a bank resolution fund.

The ministers are the governors of the fund, the European Stability Mechanism (ESM), which was created at the height of the sovereign debt crisis as a lender of last resort to governments. It has a lending capacity of 500 billion euros.

"Everyone agreed that the ESM has a very strong role to play not only the crisis management but also in the prevention of future crises," the chairman of the talks Jeroen Dijsselbloem told a news conference.

A crisis prevention role for the ESM, an intergovernmental institution, could lead to a clash with the European Commission, which under European Union law now has the sole power to monitor government policies and issue recommendations.

But a German paper prepared for the meeting said that fiscal responsibilities and fiscal control belonged together and called for a bigger role for the ESM in ensuring EU budget rules, the Stability and Growth Pact, are observed.

The rules have become too complex and less predictable now, the paper argued and proposed also introducing a sovereign debt restructuring mechanism, to be managed by the ESM, as a way to bring back more discipline to government policy-making.

"The ESM could gradually be given a stronger, neutral role with regard to the monitoring of the Stability and Growth Pact," it said, adding this could be done by amending intergovernmental treaties such as the Fiscal Compact and the ESM treaty.FUTURE CRISES

While no decisions were taken on Monday, Dijsselbloem said that the ministers broadly supported using the ESM as a backstop for the EU`s Single Resolution Fund (SRF) for banks.

The SRF was created for the resolution of failing euro zone banks and is financed from annual bank contributions. It has so far accumulated 17 billion euros and is due to reach full capacity of around 55 billion euros in 2023.

Should it find before then that it needs more money than it has received from banks, it will need a backstop - and ministers are likely to agree the ESM should play that role.

Some officials would like to see the ESM provide a similar underpinning for the yet-to-be-created European Deposit Insurance Scheme (EDIS), which will insure deposits in all euro zone countries up to 100,000 euros if opposition from Germany can be overcome.

In the paper for the meeting, Berlin again rejected it, saying it "would put much too great a strain on the ESM and go against its core purpose of bailing-out countries in severe trouble".

Germany would like to see the ESM turned into a European Monetary Fund, a move that would eliminate the need to involve the International Monetary Fund or the European Central Bank in future euro zone crises like the one that was triggered by Greece and engulfed also Ireland, Portugal, Spain and Cyprus.

The talks in Luxembourg are part of a broader discussion among finance ministers from the 19 euro zone countries on how to better organise the single currency area and integrate it more deeply after Britain leaves the European Union in 2019.

Apart from transforming the ESM, there are ideas to set up a euro zone budget, appoint a euro zone finance minister and create a euro zone subgroup in the European Parliament.

(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)

Get Latest Business News, Stock Market Updates and Videos; Check your tax outgo through Income Tax Calculator and save money through our Personal Finance coverage. Check Business Breaking News Live on Zee Business Twitter and Facebook. Subscribe on YouTube.

TAGS:
Economy
RELATED NEWS
Expert Views: BIG! India's retail inflation eases to 4.59% in December Expert Views: BIG! India's retail inflation eases to 4.59% in December
Budget 2021 Expectations – HOME BUYERS to benefit if Govt accepts this demand; JLL CEO lists following demands Budget 2021 Expectations – HOME BUYERS to benefit if Govt accepts this demand; JLL CEO lists following demands
Jobs, land prices, Covid-19 vaccine, rural India, household savings, NBFCs, banks, consumption, capex - Positives and Negatives | EXPLAINED Jobs, land prices, Covid-19 vaccine, rural India, household savings, NBFCs, banks, consumption, capex - Positives and Negatives | EXPLAINED
Economy, markets, FIIs, chemicals, IT and Pharma - Make money, as India powers to new highs | EXPLAINED    Economy, markets, FIIs, chemicals, IT and Pharma - Make money, as India powers to new highs | EXPLAINED
Setback for China – Trend reversing in favour of India; SFI lands big blow! Know here WHY! Setback for China – Trend reversing in favour of India; SFI lands big blow! Know here WHY!

LATEST NEWS

Bank Interest Rate: Best returns! These two banks top the list

Gold Price Today 19 January 2021 – Weakness in Gold as Yellow metal cheaper by Rs 40 on MCX; Silver up Rs 74

Budget 2021 Markets Want More: In chat with Anil Singhvi, expert Anand Tandon reveals expectations

SBI PO exams 2020-21: sbi.co.in— Prelims result declared on SBI official website | How to download? Here are 5 easy steps

Indigo Paints IPO Price Band, Ranking, Equity Shares, Valuation to Brand Ambassador I Important message for retails investors

PUBG Mobile India: Launch date, trailer, competition from FAUG and other latest updates

Public Provident Fund (PPF) account limit double at Rs 3 lakh from Rs 1.5 lakh? Income tax return 80C cap at Rs 2.5 lakh? This Budget demand is full of joy!

CBSE, NEET, JEE exams 2021: Big relief for students announced—check education minister Ramesh Pokhriyal message

Maruti Suzuki hikes prices of select vehicles by up to Rs 34,000

Buy gold online for just Re 1 onwards; more details inside

  • India News
  • World News
  • Companies News
  • Market News
  • Personal Finance News
  • Technology News
  • Automobile News
  • Small Business News
  • Income Tax Calculator
  • Live TV
  • Videos
  • Photos
  • Author
  • Rss Feed
  • Advertise with us
  • Privacy Policy
  • Legal Disclaimer

Latest Trending Updates

  • EPFO
  • Budget 2020
  • Income Tax Return
  • Auto Expo 2020
  • Home Loan
  • Business News

Trending Topics

  • Income Tax
  • income Tax Calculator
  • 7th Pay Commission
  • Reserve Bank of India
  • GST
  • Latest Business News

Follow us on

zeebiz
zeebiz

Partner Sites

  • Zee News
  • Hindi News
  • Marathi News
  • Bengali News
  • Tamil News
  • Malayalam News
  • Gujarati News
  • Telugu News
  • Kannada News
  • DNA
  • WION
Copyright © Zee Media Corporation Ltd. All rights reserved